Jeannine Bailliu - Bank Publications - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-28T19:44:25+00:00Exchange Rate Pass-Through and the Inflation Environment in Industrialized Countries: An Empirical Investigation
https://www.bankofcanada.ca/2004/06/working-paper-2004-21/
This paper investigates the question of whether a transition to a low-inflation environment, induced by a shift in monetary policy, results in a decline in the degree of pass-through of exchange rate movements to consumer prices.2004-06-01T14:48:59+00:00enExchange Rate Pass-Through and the Inflation Environment in Industrialized Countries: An Empirical Investigation2004-06-01Exchange ratesInflation and pricesInternational topicsWorking Paper 2004-21 https://www.bankofcanada.ca/wp-content/uploads/2010/02/wp04-21.pdfExchange Rate Pass-Through and the Inflation Environment in Industrialized Countries: An Empirical InvestigationJeannine BailliuEiji FujiiJune 2004EE3E31E4E42FF3F31Exchange Rate Pass-Through in Industrialized Countries
https://www.bankofcanada.ca/wp-content/uploads/2010/06/bailliue.pdf
Economists' long-standing interest in the degree to which exchange rate movements are reflected in prices was rekindled in the 1970s by a combination of rising inflation and the adoption of more flexible exchange rate regimes in many industrialized countries. Specifically, there were concerns that a large currency depreciation could degenerate into an inflationary spiral. Such fears were curtailed in the 1980s and early 1990s as industrialized countries began to reduce and stabilize their inflation rates. The low-inflation period most industrialized countries entered approximately a decade ago coincided with significant exchange rate depreciations that had much smaller effects on consumer prices than expected. This led to a belief that the extent to which exchange rate movements are passed through to consumer prices has declined. In this article, the authors examine why pass-through could be incomplete and review empirical estimates to determine whether pass-through has indeed declined, suggesting possible reasons for this decline and discussing the implications for monetary policy.2004-05-22T13:34:08+00:00enExchange Rate Pass-Through in Industrialized Countries2004-05-22