Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation
Sarah M. Lein
- American Economic Review (Forthcoming)
We dissect the impact of a large and sudden exchange rate appreciation on Swiss
border import prices, retail prices, and consumer expenditures on domestic and imported
non-durable goods, following the removal of the EUR/CHF
oor in January 2015.
Cross-sectional variation in border price changes by currency of invoicing carries over
to consumer prices and allocations, impacting retail prices of imports and competing
domestic goods, as well as import expenditures. We provide measures of the sensitivity of
retail import prices to border prices and the sensitivity of import shares to relative prices,
which is higher when using retail prices than border prices.
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