Exchange rate movements and foreign consumptionopen access
- Authors
- Lee, Hangyong; Lee, Jung-yong
- Issue Date
- Nov-2022
- Publisher
- 한양대학교 경제연구소
- Keywords
- inbound consumption; outbound consumption; exchange rate pass-through; substitution effect
- Citation
- Journal of Economic Research (JER), v.27, no.3, pp.293 - 308
- Indexed
- KCI
- Journal Title
- Journal of Economic Research (JER)
- Volume
- 27
- Number
- 3
- Start Page
- 293
- End Page
- 308
- URI
- https://scholarworks.bwise.kr/hanyang/handle/2021.sw.hanyang/172845
- DOI
- 10.17256/jer.2022.27.3.005
- ISSN
- 1226-4261
- Abstract
- We investigate how exchange rate movements affect inbound consumption (consumption in the domestic market by non-residents) and outbound consumption (consumption abroad by domestic residents). We find evidence of almost complete exchange rate pass-through into the price of outbound consumption while no pass-through into the price of inbound consumption. However, the exchange rate is an important determinant of both real inbound and real outbound consumption and a rise in exchange rate improves the balance of foreign consumption. We also find that there are strong substitution effects 1) between domestic consumption and outbound consumption and 2) inbound consumptions between Korea and Japan with respect to the changes in exchange rate.
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Collections - 서울 경제금융대학 > 서울 경제금융학부 > 1. Journal Articles
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