Abstract

SHARIFY, Nooraddin. A model to measure the effects of exchange rate variations on prices. Inv. Econ [online]. 2022, vol.81, n.319, pp.168-186.  Epub Feb 27, 2023. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2022.319.79071.

The paper modifies the current input-output price models to analyze exchange rate variation effects on products price indices. In so doing, a Table Adjustment Price (TAP) model was expanded to deal with different cases of the real-world economy. Among the contributions the new model makes to the literature are its ability to distinguish between the effects of imported intermediate input and imported final goods on price indices and the capability to consider imperfect exchange rate pass-through to prices of imported goods. The results of the implementation of the model for Iran’s economy indicate that only in the case of an imperfect pass-through or a non-adjustment of one or more primary factors holders’ endowments, the increment in the exchange rate will lead to smaller increments in the price indices of the products and other relevant indices.

Keywords : Exchange rate changes; price model; imports; table adjustment price; input-output.

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