Exchange Rate Pass-Through in South Africa: Panel Evidence from Individual Goods and Services
Journal of Development Studies, Forthcoming
36 Pages Posted: 19 Jul 2010 Last revised: 25 Nov 2012
Date Written: December 1, 2010
This study estimates pass-through for South Africa using samples of final goods and services, and homogenous imports. Estimated pass-through to consumer goods prices is low, roughly 16 percent in the two years following an exchange rate change; surprisingly, it is somewhat higher for services. Deviations from long run PPP appear to disappear relatively quickly, with a half-life of about 16 months. For imports, pass-through estimates are much higher, averaging around 60 percent, but with wide source-country variation. Finally, there is virtually no support for a simple linear trend change in either pass-through or in reversion to PPP during the sample.
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