Resumen de Theoretical and empirical evidence for the impact of cross-border production sharing on exchange rate pass-through.

Lihuei Lan, Luke Lin, Wenyuan Lin, Shuangshii Chuang

• This paper uses the theoretical model created by Ghosh (2009) to analyze the extent of exchange rate pass-through (ERPT) for traditional trade and different production sharing cases. Comparing the differences among these scenarios reveals that production sharing could be a reason for the continual decline in ERPT. Furthermore, empirical evidence from Taiwan indicates that under production sharing, the pricing-to-market for intermediate goods exporters and the currency fluctuation in the home country of end products exporters will further influence the magnitude of the decline in ERPT. [ABSTRACT FROM AUTHOR]