| ID | 103944 |
| Title Proper | Exchange rate pass-through |
| Other Title Information | how much do exchange rate changes affect the prices of Indian exports and imports |
| Language | ENG |
| Author | Dash, Aruna Kumar ; Narasimhan, V |
| Publication | 2011. |
| Summary / Abstract (Note) | This article investigates the exchange rate pass-through for Indian export and import prices. A markup model for aggregate export/import prices is set up, and the analysis is carried out using Johansen-Juselius cointegration and error correction models. The evidence shows partial pass-through into export prices, but more than complete pass-through into import prices, with the long-run pass-through coefficients being larger than the short-run coefficients. Thus, the Indian exporter does appear to have a little bargaining power, but it is not so with the Indian importer. The results cast a question mark over the efficacy of exchange rate changes as a policy tool in correcting trade balances, and also point to the risk of imported inflation. |
| `In' analytical Note | South Asia Economic Journal Vol. 12, No. 1; Mar 2011: p.1-23 |
| Journal Source | South Asia Economic Journal Vol. 12, No. 1; Mar 2011: p.1-23 |
| Key Words | JEL:C32 ; JEL:E31 ; JEL:F10 ; Exchange Rate Pass-Through ; Cointegration ; Error Correction Model ; Export and Import Prices |