Abstract

CASTILLO-PONCE, Ramón A.; VARELA-LLAMAS, Rogelio  and  OCEGUEDA-HERNANDEZ, Juan Manuel. Exchange rate pass-through on prices: A regional analysis. Econ. soc. territ [online]. 2013, vol.13, n.43, pp.675-695. ISSN 2448-6183.

We evaluate the pass-through of the exchange rate on the price level in Mexico. We consider the national consumer price index and regional price indexes. The analysis is implemented for the long- and short-run. The results show that the pass-through has decreased at national and regional levels for both time horizons. In the long-run the reduction is similar across regions; in the short-run, however, this is different. While in some regions the transitory effect persists, in others it does not. This suggests that each region exhibits specific socioeconomic characteristics that produce distinct inflationary dynamics.

Keywords : exchange rate pass-through; regional inflation; co-integration; common cycles.

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