This paper aims to examine the relationship between exchange rate and prices in Brazil from 1999 through 2012. Also presents a survey of theoretical and empirical literature highlighting the transmission channels of exchange price indexes in both the micro and macroeconomic. Empirical analysis uses time series econometric procedure through the Vector Error Correction. The main findings suggest a long-term relationship between exchange rates and domestic prices under consideration, although it is possible to note a degree of incomplete pass-through is also observed that the transfer is greater for the price index (IGPDI) with higher component prices wholesale.
Pass-through; price; New Open Macroeconomics
