Pass-Through of Imported Input Prices to Domestic Producer Prices: Evidence from Sector-Level Data

JaeBin Ahn, Chang-Gui Park () and Chanho Park ()
Additional contact information
Chang-Gui Park: Economic Research Team, Daejeon & Chungnam Branch, the Bank of Korea
Chanho Park: International Finance Division, International Department, the Bank of Korea

No 2016-2, Working Papers from Economic Research Institute, Bank of Korea

Abstract: Motivated by stylized facts pointing to a dominant role of imported inputs in transmitting external price shocks to domestic prices, this paper zooms in to study the pass-through of imported input costs to domestic producer prices. Our approach constructs effective input price indices from sector-level price data combined with sector-level information on input-output linkages. Applying an error correction model specification to sector-level output and input prices, the long-run pass-through rate of effective imported input costs to domestic producer prices is estimated to be around 70 percent in Korea and almost 100 percent in selected European countries.

Keywords: Exchange rate pass-through; Imported input cost pass-through; Inflation (search for similar items in EconPapers)
JEL-codes: E3 F3 F4 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2016-01-20
New Economics Papers: this item is included in nep-int, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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http://papers.bok.or.kr/RePEc_attach/wpaper/english/wp-2016-2.pdf Working Paper, 2016 (application/pdf)

Related works:
Journal Article: Pass-through of imported input prices to domestic producer prices: evidence from sector-level data (2017)
Working Paper: Pass-Through of Imported Input Prices to Domestic Producer Prices: Evidence from Sector-Level Data (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bok:wpaper:1602

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