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Federal Reserve Bank of Boston
Current Policy Perspectives
The effects of a stronger dollar on U.S. prices
Federico J. Diez
Gita Gopinath
Abstract

Since 2014:Q3, the U.S. dollar has experienced the third-fastest appreciation in over 30 years, with its nominal exchange and real exchange rate rising 15 percent against almost all foreign currencies (as measured by the Major Currencies Dollar Index). This sudden and rapid gain has engendered concerns about how a stronger dollar will affect U.S. export and import prices and ultimately, consumer prices and inflation in the United States. This paper assembles a rich database, spanning the period from 1985:Q1 through 2014:Q4, that combines several measures of prices and exchange rates in order to examine the likely outlook for U.S. import and export prices and consumer prices in the short run (one quarter) and over a 24-month period.


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Federico J. Diez & Gita Gopinath, The effects of a stronger dollar on U.S. prices, Federal Reserve Bank of Boston, Current Policy Perspectives 15-9, 01 Dec 2015.
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Keywords: exchange rates; pass-through; inflation
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