Globalization and Exchange-Rate Pass-Through in Europe: Is There a Link?
Antonia López-Villavicencio () and
Valérie Mignon ()
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Antonia López-Villavicencio: GATE-CNRS and University Lumière Lyon 2, Postal: GATE-CNRS and University Lumière Lyon 2, France
Authors registered in the RePEc Author Service: Antonia López Villavicencio
Journal of Economic Integration, 2018, vol. 33, issue 4, 773-786
Abstract:
This paper assesses the impact of globalization on Exchange-Rate Pass-Through into import prices in three core eurozone countries characterized by different degrees of openness. We looked at various indicators of globalization and used data since 1983 to find evidence of a generalized link between globalization and Exchange-Rate Pass-Through. In particular, factors related to trade integration, such as an increase in the import penetration rate or lower trade tariffs, reduce the degree of Exchange-Rate Pass-Through. However, the rising prominence of China in European imports does not contribute to the decline in pass-through. Overall, our findings show that while Exchange-Rate Pass-Through is incomplete, it remains significant even when controlling for the effects of trade globalization.
Keywords: Exchange rate pass-through; Import prices; Globalization; Eurozone. (search for similar items in EconPapers)
JEL-codes: C22 E31 F31 F40 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)
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Working Paper: Globalization and exchange rate pass-through in Europe: Is there a link? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0758
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