Is the Exchange Rate Pass-Through into Import Prices Declining? Evidence from Chile (original) (raw)
2012, Emerging Markets Finance and Trade
Several empirical studies have found that the exchange rate pass-through (ERPT) to import prices is not complete has declined in many countries during the 90s. In this paper we carry out a reexamination of these findings using a unique database of disaggregated import prices both at the border and the wholesale level for Chile. Our results do not support previous evidence. We find a complete and not declining ERPT in the long-run both pricing levels of Chilean imports. We extend previous evidence by showing that in the short-run wholesale prices seem to be less sensitive to exchange rate variations. In addition, we find weak evidence of asymmetric pass-through from appreciations versus depreciations for the aggregate import indexes.
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