Exchange rate pass-through

The nature of the shock matters: NiGEM estimations of the macroeconomic effects of recent dollar and euro fluctuations

Exchange rate fluctuations have been particularly large since mid-2014, displaying divergent developments across the period. The nominal effective exchange rate of the dollar has appreciated by 15 per cent since June 2014, masking a 25 per cent appreciation to December 2016 followed by a depreciation of 8 per cent. Changes in the euro have turned positive after being negative. This article attempts to measure the impact of currency changes on domestic activity, accounting for the source of fluctuations.