Degree of Exchange Rate Pass-through onConsumerPrices underExchange Rate Misalignment: The Case Study of Iran

Document Type : Research Paper

Authors

1 Professor, Economics Department, University of Tabriz

2 M.A.in Economics, University of Tabriz

Abstract

The main objective of this paper is to investigate the impact of exchange rate pass-through on consumer prices under exchange rate misalignment in Iran during 1353-1387. For this purpose, the exchange rate misalignment has been extracted using ARDL method and then the effect of exchange rate and exchange rate misalignment on CPI has been estimated. The results show that the degree of exchange rate pass-through (ERPT) in the short termisverysmallandequal to0,07and in the long-run ERPT is equal to 0,42. It indicatesthat the impact of the ERPT on the CPI in long run is more thanthe short run in Iran.Also, the resultsshow that exchange rate misalignment increases the Consumer Price Index.

Keywords

References

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History

  • Receive Date: 27 February 2013
  • Revise Date: 05 July 2015
  • Accept Date: 30 September 2014

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