Euro Area Countries Experience Varied Impact of Exchange Rate Changes
The article looks at how changes in exchange rates affect the prices of imports in euro area countries. By analyzing data on import prices for different products, the researchers found that the impact of exchange rate changes varies across industries and countries in the short term. However, in the long run, the differences in how exchange rate changes affect prices level out. These variations are mainly due to how open each country is to imports from outside the euro area, rather than the types of products being imported.