Exchange rate pass-through and monetary policy in emerging markets: Mexico and South Korea as case study

<p>In the nineties, emerging markets like Mexico and South Korea experienced external shocks that depreciated their domestic currencies eventually led to an overall inflation. The goal in this paper is estimate long-run short-run exchange rate pass-through (ERPT) elasticities consumer import prices determine whether monetary policies have reduced ERPT. Two Vector Error Correction Models were estimated using monthly data from 1995 2018. results show did reduce ERPT on Mexico. In Korea, was stronger, only when we account for 1997 financial crisis, contributed both prices.</p><p> </p>