Exchange rates and import prices in Switzerland

Herger, Nils

doi:10.1007/bf03399371

Cited by 1 publication

(2 citation statements)

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“…This is maybe a crucial ingredient when considering the effect of a changing market structure, where importers can enter or exit the market. As derived in Herger (2012), for a scenario of representative local and importing firms, the expenditure E t at time t with a translog function is given by…”

Section: Market Entry and Exchange Rate Pass-throughmentioning

confidence: 99%

“…Conversely, Switzerland is too small to affect the world economy, whose condition can therefore be considered as exogenous. Thirdly, though studies dedicated to Switzerland such as Stulz (2007) or Herger (2012) have found a highly incomplete ERPT with typical values between -0.2 and -0.5, the possibility that it could be higher in times of dramatic shifts in the exchange rate has not been considered. Such events can indeed be recurrently observed for the Swiss Franc.…”

Section: Econometric Strategymentioning

confidence: 99%

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Market Entries and Exits and the Nonlinear Behaviour of the Exchange Rate Pass-Through into Import Prices

Herger¹

2014

Open Econ Rev

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This discussion paper series represents research work-in-progress and is distributed with the intention to foster discussion. The views herein solely represent those of the authors. No research paper in this series implies agreement by the Study Center Gerzensee and the Swiss National Bank, nor does it imply the policy views, nor potential policy of those institutions. Terms of use: Documents in EconStor may Market Entries and Exits and the Nonlinear Behaviour of the Exchange Rate Pass-Through into Import PricesNils Herger * October 2013Abstract This paper develops an empirical framework giving rise to a nonlinear behaviour of the exchange rate pass-through (ERPT). Rather than shifts between low and high inflation, the nonlinearity arises when large swings in the exchange rate trigger market entries and exits of importing firms. Switching regressions are used to distinguish between low and high pass-through regimes of the exchange rate into import prices. For the case of Switzerland, the corresponding results suggest that, though inflation has been low and stable, the ERPT still doubles in value in times of a rapid appreciation of the Swiss Franc.JEL classification: F15, F31, L11

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Section: Market Entry and Exchange Rate Pass-throughmentioning

confidence: 99%

Section: Econometric Strategymentioning

confidence: 99%