Product-level estimates of exchange rate pass-through: Evidence from Turkey*star

Akgunduz Y. E., Bastan E. M., Demiroglu U., Tümen S.

WORLD ECONOMY, cilt.44, sa.7, ss.2203-2226, 2021 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 44 Sayı: 7
  • Basım Tarihi: 2021
  • Doi Numarası: 10.1111/twec.13060
  • Dergi Adı: WORLD ECONOMY
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, Periodicals Index Online, ABI/INFORM, Business Source Elite, Business Source Premier, CAB Abstracts, EconLit, Geobase, Index Islamicus, PAIS International, Political Science Complete, Public Affairs Index, Social services abstracts, Sociological abstracts, vLex, Worldwide Political Science Abstracts
  • Sayfa Sayıları: ss.2203-2226
  • Anahtar Kelimeler: exchange rate pass&#8208, through in Turkey, export prices, import prices, product&#8208, level estimates
  • TED Üniversitesi Adresli: Evet

Özet

We estimate the export and import pass-through rates using product-level data from Turkey. We find that the Turkish lira (TRY) exchange rate changes are mostly passed on to TRY prices of exports and imports-and, therefore, modestly to their prices in trading partners' currencies. The rate of average pass-through to TRY prices is estimated at 89% for imported goods and 82% for exported goods, with no apparent lags in the impact. Pass-through estimates by sector show variation and are relatively low for food and agricultural products. We argue that the fine-grained product-level data enable us to estimate the pass-through rates with better reliability and precision than we could by using only aggregated time-series data. We also introduce a pooled equation to estimate the difference between the export and import pass-through rates-a potentially useful statistic-in a way that allows for statistical inference.