The Effects of Foreign Exchange Rate Movements on Domestic Prices in the Turkish Manufacturing Industry

Oner Guncavdi () and Benan Zeki Orbay ()
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Oner Guncavdi: Istanbul Technical University
Benan Zeki Orbay: Istanbul Technical University

EconoQuantum, Revista de Economia y Finanzas, 2004, vol. 1, issue 1, 41-56

Abstract: This paper examines the sensitivity of domestic prices in the Turkish manufacturing industry to fluctuations in Exchange rates. In our theoretical model, domestic and foreign firms produce substitutable goods for the domestic market. Some portions of domestic firm’s inputs are assumed to be imported. Results show that sensitivity of domestic prices to movements in exchange rates is closely related to the share of imported inputs in domestic production. However, our results are inconclusive, regarding the effects of market structure on the responsiveness of domestic prices to changes in exchange rate.

Keywords: exchange rate pass-through; inflation; Turkey (search for similar items in EconPapers)
JEL-codes: D43 F31 L16 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:qua:journl:v:1:y:2004:i:1:p:41-56

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