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CPI Exchange Rate Pass-Through Decomposition and Distribution Margins: The Case of Brazil versus Advanced Economies

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  • Abdelmalack, Camila Ciss
  • Campos, Camila F.S.

Abstract

We analyze the channels through which the exchange rate af-fects nal consumer prices. We compare advanced countries withone emerging economy, Brazil, to determine the corresponding ex-change rate pass-through and its channels. A key aspect to theexchange rate pass-through is the relative importance of tradablesin the consumption basket as well as the share of imported inputs.Since non-tradables are usually cheaper in developing economies,the share of non-tradeables is smaller in theses countries. We il-lustrate this scenario using data from Brazil vis-a-vis a group ofadvanced economies.

Suggested Citation

  • Abdelmalack, Camila Ciss & Campos, Camila F.S., 2020. "CPI Exchange Rate Pass-Through Decomposition and Distribution Margins: The Case of Brazil versus Advanced Economies," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 74(1), March.
    • Handle: RePEc:fgv:epgrbe:v:74:y:2020:i:1:a:77429
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    References listed on IDEAS

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    1. Goldberg, Linda S. & Tille, Cédric, 2016. "Micro, macro, and strategic forces in international trade invoicing: Synthesis and novel patterns," Journal of International Economics, Elsevier, vol. 102(C), pages 173-187.
    2. Auer, Raphael A. & Schoenle, Raphael S., 2016. "Market structure and exchange rate pass-through," Journal of International Economics, Elsevier, vol. 98(C), pages 60-77.
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    4. Gita Gopinath & Oleg Itskhoki & Roberto Rigobon, 2010. "Currency Choice and Exchange Rate Pass-Through," American Economic Review, American Economic Association, vol. 100(1), pages 304-336, March.
    5. Linda S. Goldberg & Cédric Tille, 2009. "Micro, macro, and strategic forces in international trade invoicing," Staff Reports 405, Federal Reserve Bank of New York.
    6. Guillaume Gaulier & Amina Lahrèche-Révil & Isabelle Méjean, 2008. "Exchange-rate pass-through at the product level," Canadian Journal of Economics, Canadian Economics Association, vol. 41(2), pages 425-449, May.
    7. Jan De Loecker & Pinelopi K. Goldberg & Amit K. Khandelwal & Nina Pavcnik, 2016. "Prices, Markups, and Trade Reform," Econometrica, Econometric Society, vol. 84, pages 445-510, March.
    8. Gust, Christopher & Leduc, Sylvain & Vigfusson, Robert, 2010. "Trade integration, competition, and the decline in exchange-rate pass-through," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 309-324, April.
    9. Marazzi, Mario & Sheets, Nathan, 2007. "Declining exchange rate pass-through to U.S. import prices: The potential role of global factors," Journal of International Money and Finance, Elsevier, vol. 26(6), pages 924-947, October.
    10. repec:pri:cepsud:231deloecker is not listed on IDEAS
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    Cited by:

    1. Hülya Saygılı & Aysun Türkvatan, 2023. "Tradable and non-tradable inflation in Turkey: asymmetric responses to global factors," Empirical Economics, Springer, vol. 65(2), pages 973-1006, August.
    2. Sérgio Kannebley & Diogo de Prince & Felipe dos Santos Costa, 2023. "Sectoral Exchange Rate Pass-through to Manufacturing Prices: A GVAR Approach," Open Economies Review, Springer, vol. 34(4), pages 919-958, September.

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