Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation

Raphael Auer, Sarah Lein and Ariel Tomas Burstein

No 15397, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail prices, and consumer expenditures on domestic and imported non-durable goods, following the removal of the EUR/CHF floor in January 2015. Cross-sectional variation in border price changes by currency of invoicing carries over to consumer prices and allocations, impacting retail prices of imports and competing domestic goods, as well as import expenditures. We provide measures of the sensitivity of retail import prices to border prices and the sensitivity of import shares to relative prices, which is higher when using retail prices than border prices.

Keywords: Large exchange rate shock; Exchange rate pass-through; Invoicing currency; Expenditure switching; Optimal price-setting; Nominal rigidities (search for similar items in EconPapers)
JEL-codes: F12 F31 F41 L11 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-int, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation (2021)
Working Paper: Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation (2021)
Working Paper: Exchange rates and prices: evidence from the 2015 Swiss franc appreciation (2018)
Working Paper: Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation (2018)
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