چکیده:
T he investigation of exchange rate pass-through is an important issue in international finance. The relationship between exchange rate pass-through and exchange rate arrangements such as the dollarization regime has been examined in recent decades. For this purpose, the main objective of this study is to investigate the effect of exchange rate pass-through on the domestic inflation in selected Middle Eastern and North Africancountries with emphasis on the dollarization regime over the period from 1994 to 2012. The empirical model has been estimated by GMM approach for these countries. The main findings of this paper reveal that exchange rate appreciation (currency depreciation) has a positive and significant influence on the domestic inflation, and this effect is greater than in highly dollarized economies.
خلاصه ماشینی:
Exchange Rate Pass-Through and Inflation in Dollarized Economies: Evidence from the Middle Eastern and North African Countries Seyed Kamal Sadeghi1 ,Majid Feshari2, Maryam Barzegar Marvasti 3,Zhila Ghanbari4 Received: 2015/04/11 Accepted: 2015/10/25 Abstract he investigation of exchange rate pass-through is an important issue in international finance.
For this purpose, the mainobjective of this study is to investigate the effect of exchange rate pass- through on the domestic inflation in selected Middle Eastern and NorthAfrican countries with emphasis on the dollarization regime over the period from 1994 to 2012.
The main findings of this paper reveal that exchange rate appreciation (currency depreciation) has apositive and significant influence on the domestic inflation, and this effect is greater than in highly dollarized economies.
The objective of our paper is to conduct a more in-depth analysis of the pass-through from exchange rate changes into inflation by taking into account the balance-sheet effect likely present in highly dollarized economies (HDEs).
(2009) and Fetai (2010), the following dynamic model has been specified: Pit = αi + β1Pit -1 + β2ERit + β3DOit + β4OPEN it + β5GDPit + β6Capit +U it (1) where P is the domestic inflation rate; Pit-1 represents the inflation index of each country in t-1 time as a proxy for inflation persistence; ER: the nominal exchange rate; DO: economic dollarization degree; OPEN: trade openness degree; GDP: growth rate of gross domestic output; Cap: growth rate of gross domestic fixed capital formation and Uit represents the error term.