Based on an extended IS-LM-AS model, this study finds that if the Argentine peso depreciates 1% versus U.S. dollar, consumer price in Argentina would increase by 0.2518%. In addition, more structural fiscal deficit as a percent of potential GDP, M2 supply, higher level, and expected level raise Argentina’s level. Therefore, partial exchange rate pass-through is confirmed for Argentina.

The failure of uncovered interest rate parity to explain short-term interest rate movements is well-documented. We show that short-term changes in long-term interest rates do help explain short-term exchange-rate movements. The relationship gets stronger over our sample period, as the liquidity of the exchange rate market increased. We also show that controlling for time-varying exchange-rate r...

abstract main objective of this paper is to investigate the impact of exchange rate misalignment on wheat’s producer estimates (pse), using the 1989-2007 period’s data. for this purpose, vector error correction model (vecm) along with the use of real exchange rate based on purchasing power party (ppp) was applied to estimate nominal equilibrium exchange rates. then, by using market price suppor...