Exchange rate pass-through in the new member states of the European Union

In this paper we study the exchange rate pass-through of foreign to domestic prices using data on import unit values for nine different product categories in some new member states of the European Union (i.e., Hungary, Poland, Czech Republic, Slovak Republic and Romania), using monthly data from 2000 to 2008. By applying De Bandt, Banerjee and Kozluz (2008)'s methodology, the results show that there is no evidence in favour of the hypothesis of Local Currency Pricing (zero pass-through), while the hypothesis of Producer Currency Pricing (complete pass-through) could be accepted in some countries for different industries.