Member State vulnerability to changes in the euro exchange rate

Narcissa Balta, Karin Fischer, Plamen Nikolov and Lauri Vilmi

Quarterly Report on the Euro Area (QREA), 2014, vol. 13, issue 3, 27-33

Abstract: There have been significant fluctuations in the euro exchange rate since the start of the monetary union. This section assesses Member Statesí different degrees of vulnerability to changes in the exchange rate. It looks in particular at possible differences in the pass-through of the nominal exchange rate into import and consumer prices, and at differences in the price elasticity of export volumes. Overall, empirical results show a higher sensitivity of Spain's inflation, and export price elasticities, that are significantly higher in Italy, Portugal, Spain, Austria and France. However, in terms of overall impact on activity, differences in export elasticities tend to be offset, at least in part, by differences in trade openness and in integration in global value chains.

Keywords: exchange; rates (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:euf:qreuro:0133-03

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