Exchange rate pass-through and the prices of selected New Zealand imports : a thesis presented in partial fulfilment of the requirements for the degree of Master of Applied Economics at Massey University
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Date
1999
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Massey University
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Abstract
Estimates of pass-through for a range of resource inputs integral to the economic function of New Zealand, are calculated for the period 1988(I) to 1997(III). Estimations explaining the relationship (the pass-through effect) are reported for the five largest imports into the New Zealand economy. Estimates are run on a bilateral and disaggregated basis for imports from Australia, Japan, UK, and USA. Bilateral investigation finds a partial first quarter response but does not find complete pass-through for all products, with coefficient values displaying unexpected correlations with the exchange rate. By comparison pass-through for the aggregated data is found to be complete and rapidly achieved. All small country assumptions are found to hold for New Zealand.
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Keywords
New Zealand, Foreign exchange rates, Effect of foreign exchange on prices, Imports -- Prices