Exchange Rate Pass-through and Monetary Policy in Transition Economy: Evidence from Tunisia with a Disaggregated VAR Analysis*

Ahlem Dahem1, Fatma Siala Guermazi
International Journal of Economics and Business Administration, Volume IV, Issue 4, 50-63, 2016
EOI: 10.11220/ijeba.04.04.004
DOI: 10.35808/ijeba/111

Abstract:

Relying on monthly and quarterly data, from 2000 to 2015, this paper keeps up with SVAR modeling and price chain study, through a disaggregate approach that aims at analyzing the exchange rate pass-through (ERPT) on the various components of consumer price index (CPI).To our knowledge, this study is the first attempt at ERPT estimation through a disaggregate approach for the CPI. The results show that the total ERPT is about 20%. Specifically, 10% of PT on the administered prices after 2011 revolution date (6% of PT for food administered prices and 7% of PT for energy prices), which contradicts the prevailing theory that admits the inexistence of PT for administered prices.Our findings confirm the importance of a disaggregate analysis for studying ERPT to contain inflation.


Cite Article (APA Style)