Exchange rates: key drivers and effects on inflation and trade (2017-20)

This research network analysed the key determinants of exchange rate fluctuations and their impact on prices and trade volumes, with a particular focus on disaggregated data.

Countries in the region have recently experienced significant swings in their nominal exchange rates, especially vis-à-vis the US dollar. The economies in the region are much more integrated commercially and financially than in the past. The influences of external factors on their exchange rates may have also increased. Against this backdrop, it is key for central banks in the region to investigate whether and why the determinants and the effects of currency movements on prices, trade and policies have changed.

A distinguishing feature of the research carried out as part of this network was the use of micro or disaggregated data on prices and quantities. This approach is expected to shed new light on old questions in international economics.

Ariel Burstein (University of California, Los Angeles) was the academic adviser for this network. 

Several contributions from the network's researchers were published in a special issue of the Journal of International Money and Finance. Read the introduction to the special issue and find all the published articles on this page.

Meetings

Closing conference: "Exchange rates: key drivers and effects on inflation and trade", Mexico City, 9-10 August 2018

Workshop on "Exchange rates: key drivers and effects on inflation and trade", Mexico City, 1-2 February 2018

Papers  

Import prices and invoice currency: evidence from Chile by Fernando Giuliano and Emiliano Luttini

Effects of a mandatory local currency pricing law on the exchange rate pass-through by Renzo Castellares and Hiroshi Toma

Estimating the effect of exchange rate changes on total exports by Thierry Mayer and Walter Steingress

Industry heterogeneity and exchange rate pass-through by Camila Casas

Retailer markup and exchange rate pass-through: Evidence from the Mexican CPI micro data by Fernando Pérez-Cervantes