Exchange rates impact import prices, shaping global trade dynamics.
The article explores how changes in exchange rates affect the prices of imported goods in 23 OECD countries. In the short term, exchange rate fluctuations partially impact import prices, especially in manufacturing. However, in the long term, many imported goods are priced in the producer's currency. Countries with more volatile exchange rates see greater effects on import prices. Changes in import bundles have a bigger impact on price changes than macroeconomic factors.