Exchange rate pass-through: New evidence from German micro data

Eike Berner

No 2011-01, Economics Working Papers from Christian-Albrechts-University of Kiel, Department of Economics

Abstract: This paper examines exchange rate pass-through into German import unit values over the last 20 years. I find incomplete pass-through to be the predominant characteristic for German imports with an average rate of 42% over three months. This result holds when considering monthly 8-digit data, the most disaggregated German import data available. Furthermore, I distinguish 16 German trading partners and estimate substantial cross-country differences in the pass-through to import unit values. Imports coming from European countries generally exhibit statistically zero pass-through. By contrast, non-European trading partners are characterized by statistically significant incomplete pass-through rates. I also study whether there are differences in the pass-through rates for appreciations and depreciations, as well as for small and large exchange rate shocks. Moreover, I test for a negative correlation between the goods' quality and its pass-through rate.

Keywords: exchange rate; pass-through; import prices; Germany (search for similar items in EconPapers)
JEL-codes: F14 F31 F42 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cba, nep-eur, nep-int and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cauewp:201101

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