Exchange-rate pass-through to import prices in the euro area

Jose Campa, Linda Goldberg and Jose M. Gonzalez-Minguez
Additional contact information
Jose M. Gonzalez-Minguez: Banco de España

No D/609, IESE Research Papers from IESE Business School

Abstract: This paper presents an empirical analysis of transmission rates from exchange rate movements to import prices, across countries and product categories, in the euro area over the last fifteen years. Our results show that the transmission of exchange rate changes to import prices in the short run is high, although incomplete, and that it differs across industries and countries; in the long run, exchange rate pass-through is higher and close to one. We find no strong statistical evidence that the introduction of the euro caused a structural change in this transmission. Although estimated point elasticities seem to have declined since the introduction of the euro, we find little evidence of a structural break in the transmission of exchange rate movements except in the case of some manufacturing industries. And since the euro was introduced, industries producing differentiated goods have been more likely to experience reduced rates of exchange rate pass-through to import prices. Exchange rate changes continue to lead to large changes in import prices across euro-area countries.

Keywords: Currency; invoicing; pass-through; exchange rate; producer currency pricing; local currency pricing (search for similar items in EconPapers)
Pages: 31 pages
Date: 2005-09-18
New Economics Papers: this item is included in nep-eec, nep-fin, nep-fmk and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (179)

Downloads: (external link)
http://www.iese.edu/research/pdfs/DI-0609-E.pdf (application/pdf)

Related works:
Working Paper: Exchange rate pass through to import prices in the euro area (2005)
Working Paper: Exchange Rate Pass-Through to Import Prices in the Euro Area (2005)
Working Paper: Exchange rate pass-through to import prices in the Euro area (2005)
Working Paper: Exchange-Rate Pass-Through to Import Prices in the Euro Area (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-0609

Access Statistics for this paper

More papers in IESE Research Papers from IESE Business School IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN. Contact information at EDIRC.
Bibliographic data for series maintained by Noelia Romero ().