Why Do Consumer Prices React less than
Import Prices to Exchange Rates?1
Philippe Bacchettaa,b,c,* and Eric van Wincoopd,e
a
Studienzentrum Gerzensee, P.O. Box 21, CH-3115 Gerzensee, Switzerland
b
DEEP, Université de Lausanne, CH-1015 Lausanne, Switzerland
c
Center for Economic Policy Research, London, UK
f
University of Virginia, Charlottesville (VA), USA
b
National Bureau of Economic Research, Cambridge (MA), USA
-(/&ODVVLILFDWLRQ1XPEHUV F31, F41.
.H\ZRUGVexchange rate pass-through, currency invoicing.
*
Corresponding author: Philippe Bacchetta, Phone: ++41 31 780 31 01, Fax: ++41 31 780 31 00,
Email: [email protected]
1
Paper written for 17th Annual Congress of the European Economic Association, Venice, August 2002.
We would like to thank Richard Friberg and participants of the 2002 EEA Congress for comments and
Marco Cavaliere and Tim Frech for able research assistance. Bacchetta’s work on this paper is part of a
research network on ‘The Analysis of International Capital Markets: Understanding Europe’s role in the
Global Economy,’ funded by the European Commission under the Research Training Network Program
(Contract No. HPRN-CT-1999-00067).
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