IMF Working Papers

Exchange Rate Pass-Through in Spain

By Zuzana Murgasova

October 1, 1996

Preview Citation

Format: Chicago

Zuzana Murgasova. Exchange Rate Pass-Through in Spain, (USA: International Monetary Fund, 1996) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the factors underlying the stability of inflation observed following devaluations of the Spanish peseta, which took place during the 1992-93 Exchange Rate Mechanism (ERM) crisis. The long-run equilibrium relationships between the exchange rate and the aggregate price indices are estimated using the Johansen maximum likelihood-method. The short-run dynamics are obtained from error-correction models. The model is then simulated by calibrating changes in the exogenous variables to their actual values. The results indicate that the cost-push-up effect of devaluations may have been completely offset by determinants of the cyclical position of the economy and the low inflation rate in 1993-94 should not be viewed as unusual.

Subject: Exchange rate adjustments, Exchange rate pass-through, Export prices, Foreign exchange, Import prices, Inflation, Prices

Keywords: Effects of import price change, Exchange rate, Exchange rate adjustments, Exchange rate pass-through, Exchange rate pass-through theory, Export price change, Export prices, Home export price, Import price relationship, Import prices, Import-open economy, Import-price effect, Inflation, Inflation rate, Pass-through theory, Price change, Price inflation, Price level, Unemployment rate, Wage-price inflation spiral, WP

Publication Details

  • Pages:

    32

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1996/114

  • Stock No:

    WPIEA1141996

  • ISBN:

    9781451943412

  • ISSN:

    1018-5941

You May Also Be Interested In...

Kiribati: Agricultural Subsidies for Copra: Improving Efficiency and Equity and Balancing Trade-offs

November 21, 2024

EBA-Lite 3.0 Model and Methodology

November 18, 2024

Quarterly Projection Model for the Bank of Ghana: Extensions and Applications

November 15, 2024

Foreign Exchange Intervention Under the Integrated Policy Framework: The Case of India

November 15, 2024