September 2019 issue contents
Exchange Rate Pass-Through: What Has Changed Since the Crisis?

Martina Jašováa, Richhild Moessnerb,c, and Elöd Takátsb


We study how exchange rate pass-through to CPI inflation has changed since the global financial crisis. We have three main findings. First, exchange rate pass-through in emerging economies decreased after the financial crisis, while exchange rate pass-through in advanced economies has remained relatively low and stable over time. Second, we show that the declining pass-through in emerging markets is related to declining inflation. Third, we show that it is important to control for non-linearities when estimating exchange rate passthrough. These results hold for both short-run and long-run pass-through and remain robust to extensive changes in the specifications.

JEL Code: E31, E58, F31.

Full article (PDF, 32 pages, 1,207 kb)
Online appendix

Barnard College, Columbia University, United States
Bank for International Settlements