Declining inflation reduces pass-through effects for emerging markets – BIS paper
Central banks should be less fearful of floating their exchange rates, working paper finds
A working paper published by the Bank for International Settlements has found exchange rate pass-through in emerging economies decreased after the financial crisis, which the authors say is related to a decline in inflation.
Martina Jašová, Richhild Moessner and Előd Takáts study how exchange rate pass-through to CPI inflation has changed since the global financial crisis, using quarterly time-series data for 22 emerging and 11 advanced economies from 1994-2015.
Their findings show a decrease in
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