The importance of the distribution sector for exchange rate pass-through in a small open economy. A large scale macroeconometric modelling approach

摘要: The degree of exchange rate pass-through to domestic goods prices has important implications for monetary policy in small open economies with floating rates. Evidence indicates that is faster import than consumer prices. Price setting behaviour the distribution sector suggested as one explanation. If costs and trade margins are price components imported goods, adjustment movements may differ. We present evidence on these issues Norway by estimating a cointegrated VAR model pricing sector, paying particular attention channels likely operate through margins. Embedding this into large scale macroeconometric Norwegian economy, which inter alia includes pricing-to-market hypothesis price-wage wage-wage spirals between industries, we find be quite rapid fairly slow show importance act cushions fluctuations, thereby delaying significantly A forecasting exercise demonstrates not changed wake financial crises switch inflation targeting. also significant inflationary effects changes even short run, an insight targeting central banks.