Pass-through varies across countries and time – BoE paper

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The Bank of England

Research published by the Bank of England (BoE) seeks to bridge the gap in literature on the exchange rate’s pass-through to inflation, finding it is important to take account of both shocks and structure when assessing variation across time and countries.

In the discussion paper, published on June 30, Kristin Forbes, Ida Hjortsoe and Tsvetelina Nenova try to correct for the “striking” disconnect between the shock-based and structural literature.

They estimate pass-through using a standard red