Exchange Rates and Prices: The Case of Australian Manufactured Imports: 433 (Lecture Notes in Economics and Mathematical Systems, 433) - Softcover

Menon, Jayant

Softcover

ISBN 10: 354060801X ISBN 13: 9783540608011

Publisher: Springer, 1996

Synopsis

The objective of this study is to provide an in-depth analysis of the exchange rate pass-through relationship, using Australian imports of manufactures as a case study. The study begins by piecing together the theoretical literature on exchange rate pass-through, to provide the basis for the development of models for the empirical analysis. To place the empirical analysis m comparative context, a critical survey of the existing empirical literature on exchange rate pass-through is then undertaken. This is followed by a review of aspects of the structure and performance of Australian manufacturing that relate to the theme of the study. Next, the data and methodology are discussed. The analysis of exchange rate pass-through is conducted in two stages. First, it seeks to establish the degree to which Australian dollar (AUD) import prices of total manufactures and 50 product categories contained therein have responded to the massive fluctuations in the AUD during the 1980s. This is done by applying an econometric procedure which avoids the pit-falls in previous studies to a carefully assembled data set. Second, the study investigates the determinants of inter-product differences in the degree of exchange rate pass-through. This is done by relating the pass-through coefficients to a series of variables representing foreign control, quantitative restrictions (QRs), product characteristics and market structure within a cross­ section regression framework.

About this title

Synopsis

This text provides an in-depth analysis of the relationship between exchange rates and the prices of internationally traded goods, using Australian imports of manufactures as a case study. The study is conducted in two stages: exchange rate pass-through elasticites are estimated by applying an econometric procedure which avoids the pitfalls in previous studies to a unique data set comprising 50 product categories; and the determinants of pass-through are investigated within a model which accounts for market structure, product differentiation, non-tariff barriers and the pricing practices of multinational corporations. Separate chapters provide reviews of the theory and evidence on pass-through and developments in time-series econometrics.

Edition details

• Publisher: Springer
• Publication date: 1996
• Language: English
• ISBN 10: 354060801X
• ISBN 13: 9783540608011
• Binding: Paperback
• Number of pages: 327