How much do import price shocks matter for consumer prices?

Release date
01/11/2001
Reference
DP2001/06
Author
Tim Hampton
New Zealand and Australia have recently had large import price increases on the back of currency depreciations. Despite these large import price shocks, consumer prices have not risen as strongly as would be suggested by previously accepted relationships. The recent prolonged period of general US dollar strength has also raised the profile of exchange rate and import price pass-through in a number of other countries.