Exchange Rate Pass-through on Disaggregated Korean Export Prices: A Structural VAR Approach*

This paper analyzes the exchange rate pass-through on disaggregated Korean export prices using a structural VAR. The paper shows how the macro shocks affect disaggregated Korean export prices as well as the overall economy. After controlling for the endogeneity of the exchange rate, the paper measures the exchange rate pass-through on disaggregated Korean export prices from a structural VAR. The results show that the demand shocks and the money supply shocks generally have positive effects on disaggregated Korean export prices. The supply shocks have mixed effects on those prices. The exchange rate pass-through on Korean export prices reveals that Korean exporters generally use strategies toward the local-currency pricing. JEL Classification: F