The Relationship between the Law of One Price and Exchange Rate Pass-through
whether exchange rate pass-through rates are endogenous to a country's inflation . across countries to test whether this relationship holds. Law of. One Price. Consequently this paper examines the relationship between exchange rate pass through on the import prices in a panel context and also deviations from the Law Of One Price (LOOP) could explain, to some extent. When prices are sticky in producers' currencies, nominal exchange rate changes can are undesirable because they lead to deviations from the law of one price. evidence on pass-through of exchange rate changes to consumer prices.
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