Import Tariff and Exchange Rate Transmission in a Small Open Economy

Andrea Pereira Macera and Jose Angelo Divino

Emerging Markets Finance and Trade, 2015, vol. 51, issue S6, S61-S79

Abstract: We present a small open economy DSGE model with internal and external sticky prices in an incomplete exchange rate pass-through environment. Import tariff is included as another variable that affects the law of one price. The model is calibrated for the Brazilian economy, and the responses of endogenous variables to shocks in import tariff, aggregate supply, monetary policy, and foreign interest are analyzed. The long-run effect of the first shock is deterioration in the terms of trade because the exchange rate appreciation following this shock offsets the initial effect of the increase in import tariff.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2015.1080556 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:51:y:2015:i:s6:p:s61-s79

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2015.1080556

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().