Some Empirical Evidence on Hysteresis in Aggregate Us Import Prices
44 Pages Posted: 6 Apr 2007 Last revised: 16 Oct 2022
Date Written: 1988
Abstract
This paper empirically investigates the hypothesis that hysteresis has occurred in US aggregate non-oil import prices. We find strong evidence that a shift has occurred in the exchange rate pass-through relationship in the 1980~~ and that the nature of the shift is consistent with the hysteresis hypothesis. Results on two specific structural models of this phenomenon (the beachhead model and the bottleneck model) are less conclusive. The data broadly support both models, but neither by itself can provide a convincing accounting of all the evidence.
Suggested Citation: Suggested Citation
Baldwin, Richard E., Some Empirical Evidence on Hysteresis in Aggregate Us Import Prices (1988). NBER Working Paper No. w2483, Available at SSRN: https://ssrn.com/abstract=978414
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