Sticky prices drive low exchange rate pass-through, impacting global inflation rates.
The paper explains why changes in exchange rates don't always lead to changes in prices. It suggests that slow price adjustments are a big reason for this. By looking at data from different countries, the researchers found that the impact of exchange rates on prices is stronger in countries with higher inflation rates. This means that when prices change slowly, exchange rate changes have less of an effect on what you pay for things.