import prices only to a small extent, it may have a substantial impact on inflation, as it exerts a sizeable impact on the …

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 …

This paper investigates the empirical evidence on exchange rate pass through (ERPT) into CPI inflation for a set of …. We find that for four countries ERPT responds nonlinearly to inflation and for three of them it responds nonlinearly to …

and the UK are used as benchmark for developed economies with low inflation. The results suggest that the typical size a … of minimising inflationary consequences. On the other hand, low inflation may decrease the exchange rate pass …

exchange rate, through Consumer Price Index (CPI) inflation targeting is, however, beneficial. Welfare can, moreover, be …

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 …

reaction to Consumer Price Index (CPI) inflation rather than to domestic inflation, is welfare enhancing in all pass …-through cases. This result is moreover independent of whether society values domestic or CPI inflation stabilization. The only case … inflation and output, are sub-optimal. …

staggered price setting will aim at minimising a weighted average of domestic and import price inflation. …