As a consequence of the international environment, the currencies of many emerging market economies have experienced important depreciations in a context of high volatility in financial markets. The Mexican peso has not been the exception to the above situation. In this setting, the exchange rate pass-through into consumer prices deserves special attention as it allows us to evaluate the anchoring of inflation expectations in the Mexican economy. To address this issue, in this paper we use non-public micro data from the Mexican Consumer Price Index (CPI) to analyze the relation between exchange rate and price-setting in Mexico for the period between January 2011 and April 2016. Our estimates suggest that the exchange rate pass-through into consumer prices is low.
La serie de Documentos de Investigación del Banco de México divulga resultados preliminares de trabajos de investigación económica realizados en el Banco de México con la finalidad de propiciar el intercambio y debate de ideas. El contenido de los Documentos de Investigación, así como las conclusiones que de ellos se derivan, son responsabilidad exclusiva de los autores y no reflejan necesariamente las del Banco de México.The Working Papers series of Banco de México disseminates preliminary results of economic research conducted at Banco de México in order to promote the exchange and debate of ideas. The views and conclusions presented in the Working Papers are exclusively the responsibility of the authors and do not necessarily reflect those of Banco de México. Abstract: In this paper I use novel micro data underlying the Mexican CPI to establish stylized facts about prices in the Mexican economy. I then analyze the implications and consistency of the empirical results for the degree of monetary non-neutrality generated in both time and state-dependent pricing models. I find that the real effects of monetary shocks importantly depend on the type of nominal rigidity considered and on the treatment of sales in the statistics that are calibrated into the models.
La serie de Documentos de Investigación del Banco de México divulga resultados preliminares de trabajos de investigación económica realizados en el Banco de México con la finalidad de propiciar el intercambio y debate de ideas. El contenido de los Documentos de Investigación, así como las conclusiones que de ellos se derivan, son responsabilidad exclusiva de los autores y no reflejan necesariamente las del Banco de México.The Working Papers series of Banco de México disseminates preliminary results of economic research conducted at Banco de México in order to promote the exchange and debate of ideas. The views and conclusions presented in the Working Papers are exclusively the responsibility of the authors and do not necessarily reflect those of Banco de México.Abstract: We document the existence of asymmetric price transmission in Mexico for a wide variety of food and non-food products, in terms of magnitude and speed, for two segments of the supply chain: i) Producer (producer-wholesale) and ii) Consumer (wholesale-retail). We find that asymmetric price transmission is a common behavior in many of the good markets that we studied. However, there are important differences across stages of the supply chain: in the Producer segment, the analyzed food products exhibit larger asymmetries compared to non-food products, while we observe the opposite in the Consumer segment. The existence of these asymmetries may have important welfare effects on poor households, since they allocate a higher proportion of their expenditure for the acquisition of goods that present positive price asymmetries.Resumen: Este trabajo documenta la existencia de transmisión asimétrica de precios en México para una amplia variedad de productos alimenticios y no alimenticios, en términos de magnitud y velocidad, en dos segmentos de la cadena productiva: i) Productor (productor-mayorista) y ii) Consumidor (mayorista-minorista). Encontramos que la transmisión asimétrica de precios es un comportamiento común en muchos de los mercados de bienes estudiados. No obstante, existen diferencias importantes entre etapas de la cadena de suministro: en el segmento Productor, los bienes alimenticios analizados muestran asimetrías más grandes respecto a los productos no alimenticios, mientras que observamos lo contrario en el segmento Consumidor. La existencia de estas asimetrías podría tener efectos importantes sobre el bienestar de los hogares más pobres, ya que éstos destinan una proporción mayor de su gasto al consumo de bienes que presentan asimetrías positivas de precios. Palabras Clave: Transmisión de precios, Asimetrías positivas de precios, Mercancías alimenticias, Productos manufacturados Documento de Investigación
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