earticle

영어

As the international transaction and the openness in world market are expanded, trade among the nations gets more brisk. In addition, the volatility in exchange rate is changing unpredictably as liberalization is speeding up. In this paper, we adopt an asymmetric approach to investigate the response of the import price to exchange rate changes in Korea during the 2000-2010 period. To do so, we estimate a mark-up model for prices with an asymmetric cointegrating ARDL model, using positive and negative partial sum decompositions of the nominal exchange rates. Our results show that some commodity prices react differently to appreciations and depreciations in the long-run, an effect that was previously ignored in the literature, with an important heterogeneity across countries. In fabricated metal products & electrical machinery apparatus we find long-run asymmetric pass-through after an appreciation and a devaluation, a fact that may be due to mark-up strategy. But we find the opposite in two commodities.