El Pass Through del Tipo de Cambio: Un Análisis para la Economía Costarricense de 1991 al 2001

Exchange Rate Pass Throught: an Analysis for the Costarican Economy from 1991 to 2001

Jorge Leon, Ana Patricia Morera and Welmer Ramos

MPRA Paper from University Library of Munich, Germany

Abstract: This paper estimates a coefficient of pass through for Costa Rica and tries to determine the importance of some factors that had been pointed out by several empiric studies as probable determinants (GDP gap, real exchange rate deviation from equilibrium, economy openness, and inflationary lag). The coefficient is estimated by OLS. In order to estimate the dynamic between exchange rate and inflation rate a VAR analysis is conducted. In the short run the pass through coefficient is 16% with two months of lag. Additionally, is confirmed the importance of inflationary inertia. However in a long run analysis a pass through coefficient of 55% was found. The dynamic analysis shows that this process takes around 10 months, with an important increase in the fifth month. Finally, the study of the determinants of this coefficient shows that the most important effect is the misalignment of the real exchange rate. Additionally, the GDP gap and the economy openness have a significant impact on it.

Keywords: Inflation; Exchange Rate; Passthrough (search for similar items in EconPapers)
JEL-codes: E31 E58 F41 (search for similar items in EconPapers)
Date: 2001, Revised 2001
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Citations: View citations in EconPapers (4)

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