New Keynesian exchange rate pass-through / prepared by Woon Gyu Choi and David Cook.
Using the theory of optimal local currency pricing, this paper constructs a structural equation to estimate the rate at which foreign producer prices pass through the local currency prices of imported goods in the U.S. This can be viewed as measuring exchange rate pass-through, in line with price st...
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Full Text (via ProQuest) |
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| Main Authors: | , |
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| Format: | eBook |
| Language: | English |
| Published: |
Washington, D.C. :
International Monetary Fund,
©2008.
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| Series: | IMF working paper ;
WP/08/213. |
| Subjects: |
| Summary: | Using the theory of optimal local currency pricing, this paper constructs a structural equation to estimate the rate at which foreign producer prices pass through the local currency prices of imported goods in the U.S. This can be viewed as measuring exchange rate pass-through, in line with price stickiness in the New Keynesian Phillips curve literature. We estimate the structural equation using the generalized methods of moments for consistent estimates of exchange rate pass-through. We find that a model with a mix of local currency pricing and producer currency pricing fits the data best. The estimate of price stickiness in import prices is comparable to existing estimates of domestic price stickiness. |
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| Item Description: | At head of title: IMF Institute. "September 2008." |
| Physical Description: | 1 online resource (25 pages) |
| Bibliography: | Includes bibliographical references (pages 20-21) |
| ISBN: | 1462314422 9781462314423 1452709726 9781452709727 9786612841644 6612841648 145187071X 9781451870718 1282841645 9781282841642 |
| Language: | English. |
| Source of Description, Etc. Note: | Print version record. |