Revisiting the Decline in the Exchange Rate Pass-Through: Further Evidence from Developing Countries

16 Pages Posted: 21 Sep 2010

See all articles by Barhoumi Karim

Barhoumi Karim

Banque de France - Economic Study and Research Division

Jamel Jouini

University of 7 November at Carthage

Date Written: July 1, 2008

Abstract

The main purpose of the paper is to contribute to the empirical works relating to exchange rate pass-through. Indeed, we revisit the Taylor (2000) proposition for some developing countries in order to examine the decline in their pass-through coefficients, and to find possible explanations for this. To that effect, we adopt an empirical methodology based on some structural breaks and cointegration tests proposed respectively by Bai and Perron (1998), and Gregory and Hansen (1996). Our work is motivated by the fact that during the 1990s, some developing countries shifted their monetary policy in order to reduce the inflation.

Keywords: Exchange rate pass-through, developing countries, structural changes, cointegration tests

JEL Classification: C2, F21, F3

Suggested Citation

karim, barhoumi and Jouini, Jamel, Revisiting the Decline in the Exchange Rate Pass-Through: Further Evidence from Developing Countries (July 1, 2008). Banque de France Working Paper No. 213, Available at SSRN: https://ssrn.com/abstract=1679777 or http://dx.doi.org/10.2139/ssrn.1679777

Barhoumi Karim (Contact Author)

Banque de France - Economic Study and Research Division ( email )

31, rue Croix des Petits Champs
75049 Paris Cedex 01
FRANCE

Jamel Jouini

University of 7 November at Carthage ( email )

URGMR
Tunisia

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