T&T paper gauges exchange rate effects on import-reliant economies
Exchange rate pass-through to inflation is particularly relevant to economies that are heavily reliant on imported goods, authors say
A working paper from the Central Bank of Trinidad and Tobago assesses the degree to which exchange rate changes are transmitted into inflation in its economy.
Ashley Bobb and Lauren Sonnylal examine the relationship between the inflation rate and its determinants over the period 1995–2016. The authors gathered data on the changes in the nominal exchange rate, imported food prices, fiscal policy, money supply, purchasing power for consumers and the inflation rate.
Shocks to money supply and GDP
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