Research Programs: International Macroeconomics

Research on Exchange Rate Pass-Through

Project Leader/Sub-Leader

ITO Takatoshi

ITO Takatoshi Faculty Fellow)



The degree of exchange rate pass-through (i.e., variation of export/import and domestic prices with fluctuations in exchange rates) is an important transmission mechanism by which exchange rate fluctuations affect macroeconomic conditions. The objective of this project is to elucidate the following through theoretical and empirical analysis of the microeconomic (corporate) behaviors that determine pass-through (i.e., export/import pricing, choice of invoice currency, and foreign exchange risk management): (i) Measure the pass-through rate in Japan and discuss the effect that incompleteness in the pass-through rate has on macroeconomic policy effects, (ii) Clarify the decisive factors in corporate-level invoice currency selection, foreign exchange risk management, and pricing, (iii) Analyze the effects of deregulation of Japanese capital control in the 1990's on yen-denominated transactions and forecast the effects of easing capital control in emerging countries on the international currency system.

May 30, 2011 - March 31, 2013

Major Research Results


RIETI Discussion Papers


RIETI Discussion Papers