American Economic Review Vol. 111 No. 2 2021

Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation

Raphael Auer¹; Ariel Burstein²; Sarah M. Lein³

¹ Bank for International Settlements and CEPR (email: ) · ² UCLA (email: ) · ³ University of Basel, Faculty of Business and Economics, CEPR, and KOF ETHZ (email: )

Abstract

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 nondurable goods, following the removal of the EUR/CHF floor 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.

DOI

10.1257/aer.20181415

Volume

111

Issue

2

Pages

652-686

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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