Exchange Rate Pass-Through into Import Prices of Croatia

Safet  Kurtović; Sabina Šehić - Kršlak; Blerim  Halili; Nehat Maxhuni

Safet Kurtović
Sabina Šehić - Kršlak
Blerim Halili
Nehat Maxhuni

Keywords: exchange rate, industrial sectors, import prices, ARDL approach

Abstract

The main goal of this paper is to examine the influence of macro factors and the degree of the exchange rate pass-through (ERPT) on aggregate and disaggregate import prices of the industrial sectors in the short- and long-run. The study is based on a model used by Campa and Goldberg (2002) and Campa et al. (2005). The ERPT is determined by applying the single equation and the cointegration approach (autoregressive distributed lag model [ARDL]), vector decomposition, and data over the period from 2002Q1 to 2016Q4. In the long-run, the ERPT is complete for the aggregate import and for the industrial sector beverages and tobacco. In the short-run, the ERPT is incomplete for the aggregate import and for majority of industrial sectors. Further, we have discovered that the degree of the ERPT is higher with heterogeneous products than with homogeneous products. Due to the inaccessibility of data for micro factors, we were not able to determine their effect on import prices. The results of our research can help economic policymakers to create adequate measures in the field of economic policies that will improve the competitiveness of the economy. Finally, this paper identified the effect of the volatility degree of the ERPT on the disaggregate import prices of industrial sectors that has not been sufficiently explored so far.

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Author Biographies

Safet Kurtović

University of Travnik, Faculty of Management and Business Economics, Bosnia and Herzegovina
E-mail: safetkurtovic71@yahoo.com

Safet Kurtović received his Ph.D. in economics from the University of Belgrade in 2002. He is a professor at the Faculty of Management and Business Economics, University of Travnik. He started his professional career at the Faculty of Economics in Mostar, the University of Džemal Bijedić. His research focus is on international economics, international business, international trade, and applied economy. He has published over 80 scientific papers in leading journals and 11 books and over a dozen studies and research projects.

Sabina Šehić - Kršlak

University of Travnik, Faculty of Management and Business Economics, Bosnia and Herzegovina
E-mail: sabina.sehic.krslak@fmpe.edu.ba

Ph.D., Sabina Sehić - Kršlak is employed as an assistant professor at the Faculty of Management and Business Economics at the University of Travnik in the scientific field of management and organization and management of small and medium enterprises. She earned her Ph.D. thesis at the Faculty of Economics, University of Banja Luka, in September 2014. In the period from 2010–2014, she worked as a senior assistant at the Faculty of Economics of the University Džemal Bijedić Mostar. From 2008–2010, as an assistant at the University Džemal Bijedić, the Faculty of Business Management. Published 19 scientific research papers and six international scientific–technical conference of chosen scientific field. She published a book entitled Entrepreneurship and Small Business, in publishing the Economic Faculty of Mostar in 2016.

Blerim Halili

University „Union - Nikola Tesla", Faculty of Engineering Management, Serbia
E-mail: blerimhalili547@yahoo.com

Blerim Halili received his Ph.D. in economics from Alfa University in 2009. He is an associate professor at the Faculty of Engineering Management, University “Union - Nikola Tesla.” His research interests include theoretical economics, macroeconomics, and international finance. He has published over 30 scientific papers in leading journals and five books and over a dozen studies and research projects.

Nehat Maxhuni

University „Union - Nikola Tesla", Faculty of Engineering Management, Serbia
E-mail: nehati504@yahoo.com

Nehat Maxhuni received his Ph.D. in economics from Alfa University in 2012. He is an associate professor at the Faculty of Engineering Management, University “Union - Nikola Tesla.” He research interests include accounting and finance. He has published over 40 scientific papers in leading journals and seven books and over a dozen studies and research projects.

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