Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24786
Authors: 
Schröder, Michael
Hüfner, Felix P.
Year of Publication: 
2002
Series/Report no.: 
ZEW Discussion Papers 02-20
Abstract: 
We study the pass-through of exchange rate changes to consumer prices for the euro area by estimating vector error correction models for Germany, France, Italy, the Netherlands and Spain. Using the weights of the Harmonized Index of Consumer Prices (HICP) we compute a weighted average of the country results for the euro area. We find that in response to a ten percent depreciation of the euro nominal effective exchange rate index, the HICP tends to increase by 0,4 percent after 12 months. The total effect amounts to 0,8 percent and the adjustment of consumer prices is completed after three years.
Subjects: 
pass-through
inflation
exchange rate
euro area
JEL: 
E31
F31
F41
Document Type: 
Working Paper

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