Empirical Analysis of Exchange Rate Pass-Through in Lao PDR.
Keywords:
Exchange rate pass-through, Inflation rate, monetary policyAbstract
This paper provides a comprehensive analysis of exchange rate pass-through (ERPT) trends and their impact on inflation in Laos. The research used a Vector Autoregression (VAR) model to analyse the interaction between important macroeconomic variables. It also utilises impulse response function analysis and variance decomposition to further investigate this relationship. The results of empirical research show that exchange rate, oil price and aggregate money has significant impact on inflation in Laos. The paper highlights the significance of policymakers in Laos taking into account ERPT mechanisms when formulating monetary and fiscal policies.
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References
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