Publication
Title
Asymmetric import cost pass-through in GCC countries : evidence from nonlinear panel analysis
Author
Abstract
This paper investigates the asymmetric impacts of import costs on inflation in GCC countries. We utilize data from GCC countries and their trading partners over the period of 1990:Q1-2014:Q4 to construct a new import cost index that captures changes in both foreign prices and exchange rates. The results indicate that inflation responses to positive shocks in import costs are larger than their responses to negative shocks, confirming the presence of an asymmetric impact of import costs on inflation. This result holds only when the external shocks occur in an Asian or North American country. Furthermore, the results indicate that shocks in import cost pass-through into inflation occur only in periods of economic expansion. According to these results, monetary policy makers should take into account the nature of the shock, the geographical origin of the shock and the state of the domestic business cycle when the shock occurs.
Language
English
Source (journal)
Economic modelling. - Guilford
Publication
Guilford : 2018
ISSN
0264-9993
Volume/pages
75 (2018) , p. 432-440
ISI
000449240100031
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 10.12.2018
Last edited 20.09.2021
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