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Evolution of Exchange Rate Pass-through: Evidence from The Gambia

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  • Jobarteh, Mustapha

Abstract

The degree to which a change in exchange rate is reflected in changes in the domestic prices is termed exchange rate pass through (ERPT). In this work, we trace the evolutionary path of the ERPT to domestic prices in The Gambia using 60 windows of rolling VARs from 2002m1 to 2012m12. Our findings show pass through is higher in the long run than in the short run, and that irrespective of the horizon considered EPRT has been declining since 2002. Hence, exchange rate fluctuations those not seem to pose any significant threat to monetary policy in The Gambia.

Suggested Citation

  • Jobarteh, Mustapha, 2016. "Evolution of Exchange Rate Pass-through: Evidence from The Gambia," MPRA Paper 74664, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74664
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    References listed on IDEAS

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    1. Taylor, John B., 2000. "Low inflation, pass-through, and the pricing power of firms," European Economic Review, Elsevier, vol. 44(7), pages 1389-1408, June.
    2. Jonathan McCarthy, 2007. "Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 511-537, Fall.
    3. Mustapha Ibn Boamah, 2013. "Exchange Rate Pass-through in Countries of the Proposed West African Monetary Zone (WAMZ)," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 74-82, February.
    4. Hamid Faruqee, 2006. "Exchange Rate Pass-Through in the Euro Area," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-4.
    5. Hakan Kara & Fethi ÃÄünç, 2008. "Inflation Targeting and Exchange Rate Pass-Through: The Turkish Experience," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(6), pages 52-66, November.
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    Cited by:

    1. Ibrahim Abdulhamid Danlami, 2020. "Revisiting the West African Commonwealth Countries’ Exchange Rate Pass-Through to Inflation," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(1), pages 70-77, March.

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    More about this item

    Keywords

    Exchange Rate Pass Through; Inflation; Rolling VAR; The Gambia;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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