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Exchange rates and import prices in Switzerland

Summary

For the case of Switzerland, this paper endeavours to estimate the empirical extent to which exchange rates are “passed-through” onto import prices. For data covering the 1999 to 2010 period, the results suggest that (i) on aggregate, the exchange rate pass-through is highly incomplete with an elasticity of around 0.3 and (ii) major differences arise between industries. In particular, larger pass-through effects can be observed for certain commodities and other standardised products such as paper, timber, or minerals whilst for automobiles and textiles, the impact of the exchange rate upon import prices is almost always negligible and statistically far from significant.

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Author information

Correspondence to Nils Herger.

Additional information

This paper has greatly benefited from valuable comments and suggestions by Susan Kaplan and two thoughtful referees. The usual disclaimer applies.

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JEL-Classification

  • F15
  • F31
  • L11

Keywords

  • Exchange Rate Pass-Through
  • Import Prices
  • Swiss Franc