Local Currency Pricing and Pass-Through: An Empirical and Theoretical Analysis
Aurora Ascione ()
Rivista di Politica Economica, 2003, vol. 93, issue 6, 131-166
This paper explores the reasons behind a low elasticity of imported goods to the nominal exchange rates, analyzing empirically the law of one price and the degree of pass-through. The results show that, in the medium and long term, the degree of pass-through is low and the deviations from the law of one price on consumer prices are wide and persistent. These deviations are due to both local currency pricing strategies and the behavior of prices in the distribution services. Given these results, we propose a new decomposition of the consumer price index that takes into account multiple factors for the analysis of the degrees of pass-through.
JEL-codes: F4 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rpo:ripoec:v:93:y:2003:i:6:p:131-166
Access Statistics for this article
Rivista di Politica Economica is currently edited by Gustavo Piga
More articles in Rivista di Politica Economica from SIPI Spa
Bibliographic data for series maintained by Sabrina Marino ().