Swiss Journal of Economics and Statistics

, Volume 150, Issue 4, pp 261–296 | Cite as

Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices

  • Dario Fauceglia
  • Anirudh Shingal
  • Martin Wermelinger
Open Access


In this paper, we estimate ERPT into imported input prices and export prices using disaggregated quarterly trade data for Switzerland over 2004–2011. We find evidence for high pass-through rates into imported input prices. This demonstrates the effectiveness of natural hedging. On the export side, ERPT exhibits substantial sectoral heterogeneity and changes in imported input costs are not transmitted to foreign consumers in most cases. This suggests the use of cheaper imported inputs to offset adverse effects of currency appreciation on export profit margins.


F31 F41 


exchange rates exchange rate pass-through international trade prices 


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Copyright information

© Swiss Society of Economics and Statistics 2014

Authors and Affiliations

  • Dario Fauceglia
    • 1
  • Anirudh Shingal
    • 2
  • Martin Wermelinger
    • 3
  1. 1.University of St. Gallen and Zurich University of Applied SciencesSwitzerland
  2. 2.World Trade InstituteUniversity of BernSwitzerland
  3. 3.University of St. GallenSwitzerland

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