In the beginning of 1990s Sweden implemented several measures in order to maintain price stability. These measures have resulted in an environment in which inflation is lower and more stable. The same development could be seen in other OECD countries. At the same time a decrease in exchange rate pass-through was noticed in many countries. This has led researchers to believe that there may be a connection, between these two phenomena. This dissertation analyzes whether there has been any change in exchange rate pass-through for manufacturing products in Sweden between the high inflation period (1977-1993) and the low inflation period (1994-2006). The result shows that there is a difference in the exchange rate pass-through between the two periods. During the low inflation period the degree of pass-through was lower than during the high inflation period.
Contents
INTRODUCTION
PREVIOUS RESEARCH
THEORETICAL FRAMWORK
3.1 Pricing Model
3.2 Theoretical Specification
3.3 Model Specification
DATA & ESTIMATION METHOD
4.1 Data Description
4.2 The Model
4.3 Stationarity
4.4 Co-integration
4.5 Error Correction Model
4.6 Structural Change
4.7 Residual Analysis
RESULTS
5.1 Co-integration
5.2 Error Correction Model
5.3 Structural Change
5.4 Estimation Results
CONCLUSION
FINAL COMMENTS
APPENDIX
REFERENCES
Author: Shahbazian, Roujman
Source: Uppsala University Library
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