Exchange Rate Pass-Through in the Global Economy: The Role of Emerging Market Economies

Abstract

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The Changing Role of the Exchange Rate for Macroeconomic Adjustment

“…This is consistent with estimates in Bussière et al (2014) that for emerging market economies export and import price elasticities tend to be similar.…”

“…While exchange rate pass-through is typically estimated separately for export and import prices (e.g. Bussière et al, 2014;Campa and Goldberg, 2005;Morin and Schwellnus, 2014), this paper estimates exchange rate pass-through to the terms of trade, i.e. to the ratio of export and import prices.…”

“…Moreover, the United States is a clear outlier, with a relatively low exchange rate pass-through to the terms of trade, despite a low import content of exports. Empirical estimates of exchange rate elasticities for the United States are generally lower than for other OECD countries (Bussière et al 2014), which, on the export side, may reflect the US dollar's dominance as an invoicing currency in international trade and, on the import side, may reflect exporters' decision to price to the large US market in order to maintain competitive positions.…”

Exchange Rate Pass-Through to Domestic Prices Under Different Exchange Rate Regimes

“…He suggests that pass-through is larger in countries with a larger import share and more persistent exchange rates and import prices. Bussière and Peltonen (2008) estimated export and import price equations for a large number of countries. Their results indicate, inter alia, that exchange rate pass-through to import prices in advanced countries is falling over time indicating the increased role of emerging economies in the world economy.…”

One-size-fits-some! Capitalist diversity, sectoral interests and monetary policy in the euro area

“…Producers of 610 standardized goods, the demand for which is more price-sensitive, more often need to 'price-to market' and adjust output prices to exchange rate fluctuations. At the same time, producers of quality-differentiated goods are inclined to have higher markups, which gives them more scope to reduce output prices in response to nominal exchange rate appreciation (Bussi ere, delle Chaie, & Peltonen, 2014;Vigfusson, 615 Sheets, & Gagnon, 2007). Therefore, it can be argued that the low-D 6 3 price elasticity of CME exports follows from the fact that many tradable goods producers have adopted DQP strategies in the CMEs.…”