Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83771
Authors: 
Capistrán, Carlos
Ibarra-Ramírez, Raúl
Ramos-Francia, Manuel
Year of Publication: 
2011
Series/Report no.: 
Working Papers, Banco de México 2011-12
Abstract (Translated): 
This paper analyzes the pass-through of exchange rate to different price indexes in Mexico. The analysis is based on a vector autoregressive model (VAR) using monthly data from January 1997 to December 2010. The pass-through effects are calculated by means of accumulated impulse response functions to a recursively identified exchange rate shock. The results show that the exchange rate pass-through to import prices is complete, but it declines along the distribution chain in such a way that the impact on consumer prices is below 20 percent. Moreover, we find that the exchange rate pass-through seems to have decreased substantially from 2001 onwards, which coincides with the adoption of an inflation targeting regime by Banco de Mexico.
Subjects: 
exchange rate pass-through
import price
consumer price
distribution chain
inflation
JEL: 
E31
F31
F41
Document Type: 
Working Paper
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