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Abstract

This paper investigates the effect of changes in exchange rate on consumer price level, in Fiji, known as exchange rate pass-through during a thirty year period 1982-2009. Specifically, three time periods are focused on: the pre-coup years 1982-1986; post coup years 1987-2009; and full time period 1982-2009. Monthly data on consumer price index, nominal exchange rate, monetary aggregate and interest rate are utilized. The study results show that the degree of exchange rate pass-through to domestic price was relatively low during the entire sample period at 0.183. It was 0.453 and 0.373 for the pre and post coups periods. Regardless of the sample periods under study, the monetary aggregate, as a variable plays a pivotal in stabilizing the price level.



Item Type: MPRA Paper -

Original Title: Impact of exchange rate changes on domestic inflation: a study of a small Pacific Island economy-

English Title: Impact of Exchange Rate Changes on Domestic Inflation: A Study of a Small Pacific Island Economy-

Language: English-

Keywords: Exchange rate pass-through, price, monetary measure, cointegration, Granger causality-

Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; DeflationF - International Economics > F3 - International Finance > F31 - Foreign Exchange-





Autor: Jayaraman, T. K.

Fuente: https://mpra.ub.uni-muenchen.de/33719/







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