European Parliament Library

Exchange Rate Pass-Through in the Euro Area :, The Role of Asymmetric Pricing Behavior, Hamid Faruqee

Abstract
Exchange rate pass-through in a set of euro area prices along the pricing chain is examined. Using a vector autoregression (VAR) approach, the empirics analyze the joint time-series behavior of the euro exchange rate and a system of euro-area prices in response to an exchange rate shock. The impulse-response functions from the VAR estimates are used to identify-in a 'new open economy macroeconomics model'-those key behavioral parameters that best replicate the pattern of exchange rate pass-through in the euro area. Area-wide prices are found to display incomplete pass-through, consistent with euro currency-pricing and pricing-to-market behavior. The results are compared to those for the other major industrial economies, and suggest that, as with the United States, "expenditure-switching" effects on the current account still operate but are generally small
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. EMPIRICAL ESTIMATES""; ""A. VAR Methodology""; ""B. Cross-Country Evidence""; ""III. MODEL OF INCOMPLETE PASS-THROUGH""; ""IV. MATCHING THEORY AND EMPIRICS""; ""V. CONCLUSIONS""; ""References""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (27 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462332939

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