JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Exchange Rate Pass-Through to External and Internal Prices: A Developing Country Perspective
Author(s): M. Nusrate Aziz, Muhammad Sabbir Rahman, Alauddin Majumder, Somnath Sen
Citation: M. Nusrate Aziz, Muhammad Sabbir Rahman, Alauddin Majumder, Somnath Sen, (2013) "Exchange Rate Pass-Through to External and Internal Prices: A Developing Country Perspective," Journal of Applied Business and Economics, Vol. 15, Iss. 3, pp. 128 - 143
 
Article Type: Research paper
Publisher: North American Business Press
Abstract:
We estimate the exchange rate pass-through to external and internal prices of a developing country, 
specifically, Bangladesh. The study also examines whether the tradition view that exchange rate pass-
through should be ‘full’ for developing countries. We construct some variables which are not readily 
available in existing databases. A full sample estimation indicates that exchange rate pass-through to 
external prices is ‘full’, however, pass-through to internal prices is ‘partial’. Rolling regressions indicate 
that the response of external prices to exchange rate movement has been constantly around unity until 
2003, however, it has fallen rapidly in subsequent years. Response to internal prices has been found 
unstable and relatively small.