The Effects of Exchange Rate Pass-Through into Export Prices in Inflation Environment ——A Research Based on STR-ECM
SONG Jin-qi1, SHU Xiao-hui2
1. Science and Technology College, Jiangxi Normal University, Nanchang 330027, China; 2. Economics Department, College of Huaihua, Huaihua 418008, China
Abstract This paper studies exchange rate pass-through (ERPT) and focuses on ERPT’s nonlinear change from inflation environment perspective with data of new exchange rate regime reform. With monthly data of Chinese export prices to the U.S from 2005m7 to 2014m3, the research with co-integration analysis discovers the exchange rate, income of U.S residents and competitor prices affect export prices in the long-run. Different from other studies, this article tests Smooth transition non-linear effects of inflation environment to the ERPT on the basis of the linear error correction model. There is logistic ERPT change between 0 and 0.354 subjected to inflation environment in the short run. ERPT is small when inflation is less than 3.985 and there is almost no ERPT during deflation. ERPT is bigger when inflation is greater than 3.985.ERPT reaches maximum of 0.354 and does not change when inflation is greater than 7.
SONG Jin-Ai,SHU Xiao-Hui. The Effects of Exchange Rate Pass-Through into Export Prices in Inflation Environment ——A Research Based on STR-ECM. Economic Survey, 2016, 33(1): 066.
2016, Vol. 33 
