Estimates of Exchange Rate Pass-through with Product-level Data

Yusuf Emre Akgunduz, Emine Meltem Bastan, Ufuk Demiroglu and Semih Tumen

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: We estimate the export and import pass-through rates using product-level data from Turkey. We find that the Turkish lira (TRY) exchange rate changes are mostly passed on to TRY prices of exports and imports�and therefore modestly to their prices in trading partners� currencies. The rate of average pass-through to TRY-prices is 89% for imported goods and 82% for exported goods, with no apparent lags in the impact. Pass-through estimates by sector show variation and are relatively low for food and agricultural products. We argue that the highly-detailed productlevel data enable us to estimate the pass-through rates with better reliability and precision than we could by using only aggregated time-series data. We also introduce a pooled equation to estimate the difference between the export and import pass-through rates�a potentially useful statistic�in a way that allows statistical inference.

Keywords: Exchange rate pass-through; Product-level estimates; Turkish export prices; Turkish import prices (search for similar items in EconPapers)
JEL-codes: F14 F31 F41 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ara, nep-int and nep-opm
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1922

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