Working Paper

Who's Most Exposed to International Shocks? Estimating Differences in Import Price Sensitivity across U.S. Demographic Groups

Abstract: Differences in consumption patterns across demographic groups mean that international price shocks differentially affect such groups. We construct import price indexes for U.S. consumer groups that vary by age, race, sex, education, and urban status. Black consumers and college graduates experienced significantly higher import price inflation from 1996-2018 compared to other groups, such as high school dropouts, rural consumers, and consumers over 60. Sensitivity to international price shocks varies widely, implying movements in exchange rates and foreign prices, both during our sample and during the Covid-19 pandemic, drove sizable differences in import price inflation – and total inflation – across groups.

Keywords: Import price inflation; Exchange-rate passthrough; Inequality;

JEL Classification: D12; E31; F31;

https://doi.org/10.17016/IFDP.2023.1380

Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: International Finance Discussion Papers

Publication Date: 2023-09-27

Number: 1380