Changes in import pricing behaviour:the case of Germany

Since changes in import prices feed into consumer prices and thus might affect monetary policydecisions, policymakers need to establish whether or not German importers’ long-run pricingbehaviour has changed. Of particular interest are any shifts in the importance of cost passthroughand pricing-to-market for import pricing in Germany that may have ocurred since the1990s. We analyse pricing in single equations for 11 product categories because the factorsinfluencing the pricing behaviour, eg competitive pressure, may well have developed differentlyon the individual product markets. The Saikkonen (1991) approach is applied to test the importprice levels for changes in the impact of their determinants. After aggregating the findings forthe individual product categories, we find that, on the whole, pricing-to-market has increased,whereas cost pass-through via foreign costs and exchange rates is lower, but not via commodityprices.[...] Kerstin Stahn