Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices

Fauceglia, Dario; Shingal, Anirudh; Wermelinger, Martin (2014). Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices. Swiss journal of economics and statistics / Schweizerische Zeitschrift für Volkswirtschaft und Statistik, 150(4), pp. 261-296. Lang

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In this paper, we estimate ERPT into imported input prices and export prices using disaggregated quarterly trade data for Switzerland over 2004–2011. We find evidence for high pass-through rates into imported input prices. This demonstrates the effectiveness of natural hedging. On the export side, ERPT exhibits substantial sectoral heterogeneity and changes in imported input costs are not transmitted to foreign consumers in most cases. This suggests the use of cheaper imported inputs to offset adverse effects of currency appreciation on export profit margins.

Item Type:

Journal Article (Original Article)

Division/Institute:

02 Faculty of Law > Department of Economic Law > World Trade Institute
10 Strategic Research Centers > World Trade Institute

UniBE Contributor:

Shingal, Anirudh

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0303-9692

Publisher:

Lang

Language:

English

Submitter:

Rebecca Anne Gilgen

Date Deposited:

07 Jul 2016 13:49

Last Modified:

01 Jun 2017 12:18

Related URLs:

JEL Classification:

F31, F41

BORIS DOI:

10.7892/boris.83795

URI:

https://boris.unibe.ch/id/eprint/83795

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