Revisiting the exchangerate pass‐through : a general equilibrium perspective

Mostrar todas las versiones(2)

Abstract: A large literature estimates the exchange-rate pass-through to prices (ERPT) using reducedform approaches. The results from these studies are an important input at Central Banks. We study the usefulness of these empirical measures for actual monetary policy analysis and decision making,...

Descripción completa

Guardado en:
Detalles Bibliográficos
Autores principales: García Cicco, Javier, García Schmidt, Mariana
Formato: Documento de trabajo
Lenguaje:Inglés
Publicado: Pontificia Universidad Católica Argentina. Facultad de Ciencias Económicas. Departamento de Investigación Francisco Valsecchi 2020
Materias:
POLITICA MONETARIA
FINANZAS
ECONOMIA INTERNACIONAL
COMERCIO INTERNACIONAL
MACROECONOMIA
Acceso en línea:https://repositorio.uca.edu.ar/handle/123456789/9974
Aporte de:
Repositorio Institucional de la Universidad Católica Argentina (UCA) de Universidad Católica Argentina
id I33-R139-123456789-9974
record_format dspace
spelling I33-R139-123456789-99742024-03-21T11:13:07Z Revisiting the exchangerate pass‐through : a general equilibrium perspective García Cicco, Javier García Schmidt, Mariana POLITICA MONETARIA FINANZAS ECONOMIA INTERNACIONAL COMERCIO INTERNACIONAL MACROECONOMIA Abstract: A large literature estimates the exchange-rate pass-through to prices (ERPT) using reducedform approaches. The results from these studies are an important input at Central Banks. We study the usefulness of these empirical measures for actual monetary policy analysis and decision making, emphasizing two main shortcomings that arise naturally from a general equilibrium perspective. First, while the empirical literature computes a single ERPT measure, in a general equilibrium model the evolution of the exchange rate and prices will differ depending on the shock hitting the economy. Accordingly, we distinguish between conditional and unconditional ERPT measures, showing that they can lead to very different interpretations. Second, in a general equilibrium model the ERPT crucially depends on the expected behavior of monetary policy; although the empirical literature cannot account for this. As a result, results from this literature might provide a misleading guide for monetary policy. We highlight the quantitative relevance of these with a DSGE model of a small and open economy with sectoral distinctions, real and nominal rigidities, and a variety of driving forces; estimated using Chilean data. 2020-05-13T20:13:01Z 2020-05-13T20:13:01Z 2017 Documento de trabajo García-Cicco, J., García-Schmidt, M. Revisiting the exchangerate pass‐through : a general equilibrium perspective [en línea]. Documento de trabajo Nro. 58 del Departamento de Investigación Francisco Valsecchi. Facultad de Ciencias Económicas. Pontificia Universidad Católica Argentina. 2017. Disponible en: https://repositorio.uca.edu.ar/handle/123456789/9974 https://repositorio.uca.edu.ar/handle/123456789/9974 eng Acceso abierto http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Pontificia Universidad Católica Argentina. Facultad de Ciencias Económicas. Departamento de Investigación Francisco Valsecchi Documento de trabajo Nro. 58 del Departamento de Investigación Francisco Valsecchi. Facultad de Ciencias Económicas. Pontificia Universidad Católica Argentina. 2017
institution Universidad Católica Argentina
institution_str I-33
repository_str R-139
collection Repositorio Institucional de la Universidad Católica Argentina (UCA)
language Inglés
topic POLITICA MONETARIA
FINANZAS
ECONOMIA INTERNACIONAL
COMERCIO INTERNACIONAL
MACROECONOMIA
spellingShingle POLITICA MONETARIA
FINANZAS
ECONOMIA INTERNACIONAL
COMERCIO INTERNACIONAL
MACROECONOMIA
García Cicco, Javier
García Schmidt, Mariana
Revisiting the exchangerate pass‐through : a general equilibrium perspective
topic_facet POLITICA MONETARIA
FINANZAS
ECONOMIA INTERNACIONAL
COMERCIO INTERNACIONAL
MACROECONOMIA
description Abstract: A large literature estimates the exchange-rate pass-through to prices (ERPT) using reducedform approaches. The results from these studies are an important input at Central Banks. We study the usefulness of these empirical measures for actual monetary policy analysis and decision making, emphasizing two main shortcomings that arise naturally from a general equilibrium perspective. First, while the empirical literature computes a single ERPT measure, in a general equilibrium model the evolution of the exchange rate and prices will differ depending on the shock hitting the economy. Accordingly, we distinguish between conditional and unconditional ERPT measures, showing that they can lead to very different interpretations. Second, in a general equilibrium model the ERPT crucially depends on the expected behavior of monetary policy; although the empirical literature cannot account for this. As a result, results from this literature might provide a misleading guide for monetary policy. We highlight the quantitative relevance of these with a DSGE model of a small and open economy with sectoral distinctions, real and nominal rigidities, and a variety of driving forces; estimated using Chilean data.
format Documento de trabajo
author García Cicco, Javier
García Schmidt, Mariana
author_facet García Cicco, Javier
García Schmidt, Mariana
author_sort García Cicco, Javier
title Revisiting the exchangerate pass‐through : a general equilibrium perspective
title_short Revisiting the exchangerate pass‐through : a general equilibrium perspective
title_full Revisiting the exchangerate pass‐through : a general equilibrium perspective
title_fullStr Revisiting the exchangerate pass‐through : a general equilibrium perspective
title_full_unstemmed Revisiting the exchangerate pass‐through : a general equilibrium perspective
title_sort revisiting the exchangerate pass‐through : a general equilibrium perspective
publisher Pontificia Universidad Católica Argentina. Facultad de Ciencias Económicas. Departamento de Investigación Francisco Valsecchi
publishDate 2020
url https://repositorio.uca.edu.ar/handle/123456789/9974
work_keys_str_mv AT garciaciccojavier revisitingtheexchangeratepassthroughageneralequilibriumperspective
AT garciaschmidtmariana revisitingtheexchangeratepassthroughageneralequilibriumperspective
_version_ 1807949137511972864

Ejemplares similares