Exchange rate pass-through for selected Southeast Asian countries

College

College of Science

Department/Unit

Chemistry

Document Type

Article

Source Title

DLSU Business and Economics Review

Volume

18

Issue

2

First Page

115

Last Page

126

Publication Date

1-1-2009

Abstract

Long- and short-run exchange rate pass-through coefficients were estimated for Malaysia, Indonesia, Thailand, and the Philippines using a simple model based on absolute purchasing power parity. Results were lower than 0.30 for all four countries. Co-integration tests confirmed the existence of a long-run relationship between CPI, GDP, exchange rate, and the U.S. PPI for the countries studied. However, the post-estimation tests showed that a more comprehensive model may need to be developed. The low coefficients reflect the success of the countries in stabilizing their inflation levels, though implying that exchange rate interventions may be less effective in restoring trade balance. © 2009 De La Salle University, Manila, Philippines.

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Digitial Object Identifier (DOI)

10.3860/ber.v18i2.796

Disciplines

Business

Keywords

Exchange rate pass-through--Southeast Asia; Inflation (Finance)--Southeast Asia

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