What is the Impact of Exchange Rate Changes on Inflation in Asia?

Amit Ghosh

Chapter 2 in Exchange Rates, Currency Crisis and Monetary Cooperation in Asia, 2009, pp 39-59 from Palgrave Macmillan

Abstract: Abstract Exchange rate pass-through (ERPT) refers to the transmission of exchange rate changes into import (export) prices of specific goods in the destination market currency price of goods. ERPT is said to be partial or incomplete if the import price rises by less than 1 percent, as the exporters absorb a portion of the exchange rate change. This may arise, for instance, because firms engage in pricing-to-market (PTM), which effectively implies that firms with market power in a segmented market are able to sell the same product at different prices in different markets (Dornbusch 1987; Krugman 1987; also see the surveys by Goldberg and Knetter 1997 and Menon 1995).

Keywords: Exchange Rate; Real Exchange Rate; Intermediate Good; Exchange Rate Regime; Import Price (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-23419-2_2

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DOI: 10.1057/9780230234192_2

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