Yu Hsing
Department of Management & Business Administration, College of Business, Southeastern Louisiana University, USA

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A Simultaneous-Equation Model of Estimating Exchange Rate Pass-Through in Malaysia Yu Hsing
Quantitative Economics and Management Studies Vol. 1 No. 3 (2020)
Publisher : Yayasan Ahmar Cendekia Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | Full PDF (382.295 KB) | DOI: 10.35877/454RI.qems193

Abstract

Based on an extended IS-LM-AS model, this study finds that a 1% depreciation of the Malaysian ringgit tends to cause the CPI to rise by 0.1194%. Moreover, more M2 money supply, a lower government borrowing as a percent of GDP, a higher crude oil price, a higher U.S. CPI, and a higher expected consumer price index tend to raise Malaysia’s CPI. Therefore, exchange rate pass-through (ERPT) to the consumer price in Malaysia is partial and incomplete.