Introduction to a Special Section on 'Exchange Rate Pass-through in Developing and Emerging Markets'

The interest in exchange rate pass-through (ERPT) in emerging market and developing economies has burgeoned in the last two decades. Small, open and trade-dependent economies embody special features that can make it difficult to obtain reliable estimates of ERPT. This Special Section includes a survey of recent research in developing and emerging market countries on ERPT, focusing on the monetary policy relevance of ERPT.The frequent misspecifications that produce unreliable ERPT estimates are highlighted. Many empirical issues raised in the survey are illustrated by the macro- and the micro-economic empirical studies on South Africa (SA) included in this Special Section, and an earlier published JDS paper on ERPT in SA.