Pass Through del Tipo de Cambio en los Precios de Bienes Transables y No Transables en Costa Rica
Exchange Rate Pass Through into the Prices of Tradable and Non Tradable Goods in Costa Rica
Bernal Laverde and
MPRA Paper from University Library of Munich, Germany
This paper estimates short run and long run coefficients of exchange rate pass through in to the prices of tradable and non-tradable goods in Costa Rica. The coefficients are estimated by OLS. A VAR analysis is conducted in order to estimate the dynamic process between exchange rate and inflation. Granger causality test and a stability test are conducted too. The short run pass through coefficients are 13% and 10%, for tradable and non-tradable goods respectively and the long run coefficients are 68% and 52% in the same order. There is a second stage pass through of 7% included in the long run coefficient for non-tradable goods. The dynamic analysis shows that the adjustment process of prices as a result of an exchange rate shock takes 17 months for tradable goods and 27 months for non-tradable goods. The Granger causality test shows precedence between variation in the exchange rate and inflation, and between the prices of tradable and non-tradable goods. There is statistical evidence of a structural change in the non-tradable model between the end of 1995 and the beginning of 1996.
Keywords: Tipo de Cambio; Inflación; Transables; No Transables (search for similar items in EconPapers)
JEL-codes: E31 F31 (search for similar items in EconPapers)
Date: 2002, Revised 2002
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44527
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