Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212638 
Year of Publication: 
2008
Series/Report no.: 
BOFIT Discussion Papers No. 25/2008
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper estimates export and import price equations for 41 countries -including 28 emerging market economies. Further, it relates the estimated elasticities to structural fac-tors and tests for statistical breaks in the relation between trade prices and exchange rates. Results indicate that (i) the elasticity of trade prices in emerging markets is sizeable, but not significantly higher than in advanced economies; (ii) such elasticity is primarily influ-enced by macroeconomic factors such as the exchange rate regime and the inflationary en-vironment, although microeconomic factors such as product differentiation also play a role; (iii) export and import price elasticities tend to be strongly correlated across countries; (iv) pass-through to import prices has declined in some advanced economies, noticeably the United States; this is consistent with a rise in pricing-to-market in several EMEs and espe-cially with a change in the geographical composition of U.S. imports.
Subjects: 
emerging market economies
exchange rate pass-through
pricing-to-market
local and producer currency pricing
exchange rate regime
JEL: 
F10
F30
F41
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-941-6
Document Type: 
Working Paper

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