Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis

We use detailed data for Iceland to examine two often-neglected aspects of the “exchange rate pass-through” problem. First, we investigate whether the pass-through coefficient varies with the degree of “international tradability” of goods. Second, we analyze if the pass-through coefficient depends o...

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Main Authors: Sebastian Edwards, Luis Cabezas
Format: Report
Language:unknown
Subjects:
Iceland
Online Access:http://www.nber.org/papers/w28520.pdf
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spelling ftrepec:oai:RePEc:nbr:nberwo:28520 2024-04-14T08:13:22+00:00 Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis Sebastian Edwards Luis Cabezas http://www.nber.org/papers/w28520.pdf unknown http://www.nber.org/papers/w28520.pdf preprint ftrepec 2024-03-19T10:39:49Z We use detailed data for Iceland to examine two often-neglected aspects of the “exchange rate pass-through” problem. First, we investigate whether the pass-through coefficient varies with the degree of “international tradability” of goods. Second, we analyze if the pass-through coefficient depends on the monetary policy framework. We consider 12 disaggregated price indexes in Iceland for 2003-2019, a period that includes Iceland’s banking and currency crisis of 2008. We find that the pass-through declined around the time Iceland reformed its “flexible inflation targeting,” and that the coefficients are significantly higher for tradable than for nontradable goods. Report Iceland RePEc (Research Papers in Economics)
institution Open Polar
collection RePEc (Research Papers in Economics)
op_collection_id ftrepec
language unknown
description We use detailed data for Iceland to examine two often-neglected aspects of the “exchange rate pass-through” problem. First, we investigate whether the pass-through coefficient varies with the degree of “international tradability” of goods. Second, we analyze if the pass-through coefficient depends on the monetary policy framework. We consider 12 disaggregated price indexes in Iceland for 2003-2019, a period that includes Iceland’s banking and currency crisis of 2008. We find that the pass-through declined around the time Iceland reformed its “flexible inflation targeting,” and that the coefficients are significantly higher for tradable than for nontradable goods.
format Report
author Sebastian Edwards
Luis Cabezas
spellingShingle Sebastian Edwards
Luis Cabezas
Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis
author_facet Sebastian Edwards
Luis Cabezas
author_sort Sebastian Edwards
title Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis
title_short Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis
title_full Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis
title_fullStr Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis
title_full_unstemmed Exchange Rate Pass-Through, Monetary Policy, and Real Exchange Rates: Iceland and the 2008 Crisis
title_sort exchange rate pass-through, monetary policy, and real exchange rates: iceland and the 2008 crisis
url http://www.nber.org/papers/w28520.pdf
genre Iceland
genre_facet Iceland
op_relation http://www.nber.org/papers/w28520.pdf
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