conventional wisdom is that relative price changes are the primary mechanism by which shocks are transmitted across borders. Yet … manufacturers generally bear more of the cost (or reap more of the benefit) of an exchange-rate-induced marginal cost shock than do …

This paper examines the presence of asymmetric behavior in exchange rate pass-through (ERPT) to CPI inflation in 12 …

This paper examines the presence of asymmetric behavior in exchange rate pass-through (ERPT) to CPI inflation in 12 …

and the UK are used as benchmark for developed economies with low inflation. The results suggest that the typical size a … of risk premium shock renders it almost impossible for the interest rate policy to smooth the exchange rate with the aim … of minimising inflationary consequences. On the other hand, low inflation may decrease the exchange rate pass …

-Wholesaler-Retailer Model. Within this framework we investigate how changes in local currency affect the strategic management variables of price …

The central bank's optimal reaction to foreign and domestic shocks is analyzed in an inflation targeting model allowing … that the interest rate response to foreign shocks is smaller when pass-through is low. Second, the inflation … rigidity, leads to higher exchange rate volatility. With exogenous nominal price stickiness, part of the required relative …

This paper analyzes the pass-through of exchange rate to different price indexes in Mexico. The analysis is based on a … calculated by means of accumulated impulse response functions to a recursively identified exchange rate shock. The results show … have decreased substantially from 2001 onwards, which coincides with the adoption of an inflation targeting regime by Banco …

Recent literature has argued that exchange rate pass-through (ERPT) into domestic inflation has been declining in many … countries following a dramatic change in inflation environment during the 1990s. Available empirical results face two central … arbitrariness; and (ii) the link between a lower ERPT and inflation environment is usually based on simple correlation analysis and …

A large body of empirical work has found that exchange rate movements have only modest effects on inflation. However …, the response of an import price index to exchange rate movements may be underestimated because some import price changes … are missed when constructing the index. We investigate downward biases that arise when items experiencing a price change …