Natalie Chen, 08 May 2018

Exchange rate movements pass through to the prices consumers pay domestically. Natalie Chen discusses how, in order to understand the relationship between exchange rates and domestic inflation, we must look beyond the bilateral exchange rates between importing and exporting countries. What is key is the exchange rate movement between the importing currency and the one in which goods are invoiced.

Kristin Forbes, Ida Hjortso, Tsvetelina Nenova, 12 February 2016

A major challenge for monetary policy is predicting how exchange rate movements will impact inflation. This column explains why rules of thumb could be misleading and proposes a new approach that incorporates the source of exchange rate movements when evaluating how they pass through to import prices and inflation.

Events

CEPR Policy Research