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Constraints on exchange rate flexibility in transition economies: a meta-regression analysis of exchange rate pass-through

Author

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  • Igor Velickovski
  • Geoffrey Thomas Pugh
Abstract
This article uses Meta-Regression Analysis (MRA) to investigate exchange rate pass-through to domestic prices, highlighting differences between transition and developed economies. A total of 23 studies yielded 575 coefficients measuring exchange rate pass-through to import prices and consumer prices for 23 developed and 12 transition economies. The MRA results confirm the finding of many particular analyses that exchange rate pass-through is less than complete. In addition, exchange rate pass-through is higher to import prices than to consumer prices; and exchange rate pass-through is higher in the long run than in the short run. Regarding transition and developed economies, MRA suggests that there is no statistically significant difference in exchange rate pass-through to import prices. Yet, exchange rate pass-through to consumer prices is significantly and substantially higher in transition than in developed economies. This finding is consistent with the caution of many monetary authorities in transition economies regarding exchange rate flexibility.

Suggested Citation

  • Igor Velickovski & Geoffrey Thomas Pugh, 2011. "Constraints on exchange rate flexibility in transition economies: a meta-regression analysis of exchange rate pass-through," Applied Economics, Taylor & Francis Journals, vol. 43(27), pages 4111-4125.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:27:p:4111-4125
    DOI: 10.1080/00036846.2010.485927
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    References listed on IDEAS

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    Cited by:

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    2. Lan Nguyen, Thi Mai & Papyrakis, Elissaios & van Bergeijk, Peter A.G., 2021. "Publication bias in the price effects of monetary policy: A meta-regression analysis for emerging and developing economies," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 567-583.
    3. Safet Kurtović & Blerim Halili & Nehat Maxhuni, 2019. "Exchange rate pass-through into import prices: evidence from Central and Southeast European countries," Indian Economic Review, Springer, vol. 54(1), pages 51-80, June.
    4. Kurtović Safet & Šehić-Kršlak Sabina & Halili Blerim & Maxhuni Nehat, 2018. "Exchange Rate Pass-Through into Import Prices of Croatia," Naše gospodarstvo/Our economy, Sciendo, vol. 64(4), pages 60-73, December.
    5. Jovanovic, Branimir & Petreski, Marjan, 2014. "Monetary policy, exchange rates and labor unions in SEE and the CIS during the financial crisis," Economic Systems, Elsevier, vol. 38(3), pages 309-332.
    6. Kurtović, Safet & Siljković, Boris & Denić, Nebojša & Petković, Dalibor & Mladenović, Svetlana Sokolov & Mladenović, Igor & Milovancevic, Milos, 2018. "Exchange rate pass-through and Southeast European economies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 503(C), pages 400-409.
    7. Jerome Geyer-Klingeberg & Markus Hang & Matthias Walter & Andreas Rathgeber, 2018. "Do stock markets react to soccer games? A meta-regression analysis," Applied Economics, Taylor & Francis Journals, vol. 50(19), pages 2171-2189, April.
    8. Igor Velickovski, 2013. "Assessing independent monetary policy in small, open and euroized countries: evidence from Western Balkan," Empirical Economics, Springer, vol. 45(1), pages 137-156, August.
    9. Bošnjak Mile & Kordić Gordana & Bilas Vlatka, 2018. "Determinants Of Financial Euroisation In A Small Open Economy: The Case Of Serbia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(218), pages 9-22, July – Se.
    10. repec:wsr:wpaper:y:2012:i:081 is not listed on IDEAS
    11. Thi Mai Lan Nguyen, 2020. "Output Effects of Monetary Policy in Emerging and Developing Countries: Evidence from a Meta-Analysis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(1), pages 68-85, January.
    12. Tokunaga, Masahiro & Iwasaki, Ichiro, 2014. "Transition and FDI: A Meta-Analysis of the FDI Determinants in Transition Economies," RRC Working Paper Series 47, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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