Differences in exchange rate pass-through in the euro area

Jose Campa and Jose M. Gonzalez
Additional contact information
Jose M. Gonzalez: Banco de España

No D/479, IESE Research Papers from IESE Business School

Abstract: This paper focuses on the pass-through of exchange rate changes into the prices of imports made by euro area countries originating outside the area. Using data on import unit values for thirteen different product categories for each country, we estimate industry-specific rates of pass-through across and within countries for all euro members. In the short-run, pass-through rates differ across industries and countries and are less than one. In the longrun

neither full pass-through nor equality of pass-through rates across industries and countries can be rejected. Differences exist across euro area countries in the degree that a common exchange rate movement gets transmitted into consumer prices and costs of production indices. Most of these differences in transmission rates are due to the distinct degree of openness of each country to non-euro area imports rather than to the heterogeneity in the structure of imports.

Keywords: Exchange rate; pass-through; euro; monetary union (search for similar items in EconPapers)
Pages: 30 pages
Date: 2002-10-15
New Economics Papers: this item is included in nep-ifn
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Citations: View citations in EconPapers (15)

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http://www.iese.edu/research/pdfs/DI-0479-E.pdf (application/pdf)

Related works:
Journal Article: Differences in exchange rate pass-through in the euro area (2006)
Working Paper: Differences in Exchange Rate Pass-Through in the Euro Area (2004)
Working Paper: Differences in exchange rate pass-through in the euro area (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0479

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