Product Storability and Exchange Rate Passthrough: Evidence from Chilean Exports — Vasundhara Thakur

Speaker

Vasundhara Thakur (Kiel Institute; Bielefeld University)

Abstract

Export price exchange rate pass-through determines how much export prices adjust to changes in the exchange rate. Since exported goods can be perishable or non-perishable, this paper asks whether this product-level primitive of perishability matters for the export price exchange rate pass-through. It develops an exporter-level price-setting model to capture the structural differences in price setting faced by exporters of perishable goods. This model introduces a new channel determining exchange rate pass-through alongside featuring the two standard channels. The paper finds evidence of heterogeneity in exchange rate pass-through across the dimension of perishability using a dataset on Chilean exporters from 2009 to 2015. 

Room

Media Room (A-211)