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2014 | OriginalPaper | Buchkapitel

13. Reforms, Exchange Rate Pass-Through and India’s Export Prices

verfasst von : Saikat Sinha Roy, Pradyut Kumar Pyne

Erschienen in: Trade, Globalization and Development

Verlag: Springer India

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Abstract

Using a Demand–Supply model of export determination along the lines of an imperfect substitutes model, exchange rate pass-through is estimated in this study. This is done using a time comparable panel dataset and the panel data econometric technique. The results show incomplete and low exchange rate pass-through to India’s aggregate export prices. However, the extent of exchange rate pass-through varies across product groups. The findings on exchange rate pass-through have implications for exchange rate being used as a policy instrument for export promotion and growth during reforms on the one hand, and in narrowing the current account deficit, on the other hand.

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Gagnon and Knetter (1995) show that in the presence of adjustment costs, export prices might show short run adjustments essentially in terms of error correction mechanism. A large number of studies including Athukorala (1991); Athukorala and Menon (1995); Banik and Biswas (2007); Feenstra et al. (1996); Gagnon and Knetter (1995); Gross and Schmitt (1996, 2000) and Yang (1998) have estimated both long run and short run pass-through coefficients, while Gil-Pareja (2001); Knetter (1994); Mann (1986); Marston (1990) and Yang (1997) have estimated the short run pass-through coefficient only.

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Titel: Reforms, Exchange Rate Pass-Through and India’s Export Prices
verfasst von: Saikat Sinha Roy
Pradyut Kumar Pyne
Verlag: Springer India
Buch: Trade, Globalization and Development
Print ISBN: 978-81-322-1150-1

Electronic ISBN: 978-81-322-1151-8

Copyright-Jahr: 2014
DOI: https://doi.org/10.1007/978-81-322-1151-8_13

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