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The purpose of this paper is to examine the degree of the exchange rate pass-through (ERPT) to the consumer price index (CPI) at both aggregated and disaggregated levels in Vietnam. Updated data of the nominal effective exchange rate (NEER) and bilateral exchange rate (BiER) have been utilized in this study for the comparison purposes.

Advanced time-series approaches such as a structural vector autoregressive framework, structural impulse response functions (SIRFs), and structural forecast-error variance decomposition (SFEVD) are utilized in this paper.

Empirical findings from this paper present an incomplete degree of the ERPT to the aggregated CPI. The ERPT based on the BiER is observed to have substantially larger magnitude than the NEER-based pass-through. For the disaggregated level, the degree of the ERPT varies considerably across sub-components of the CPI, with a higher magnitude of the ERPT elasticity being found from the BiER estimations. The index of housing and construction materials has the largest ERPT based on the BiER, followed by the food and foodstuffs (1.00 and 0.56, respectively). The macroeconomic and financial environments as well as an economic integration into the global market may be the main causes of a higher ERPT in Vietnam in comparison with other ASEAN countries.

The significant and incomplete pass-through of the exchange rate in Vietnam can affect firms’ and households’ budget planning, savings and profits. This finding generally implies that the cost of devaluation of the domestic currency affects the society as the whole in terms of welfare. The State Bank of Vietnam should carefully consider the overall effect of welfares when formulating and implementing strategies of currency devaluation. In addition, the Vietnamese economy becomes more sensitive to external vulnerabilities via changes of the exchange rate during an increasingly economic integration into the global market. In order to maintain inflation stability, it is vitally important to reduce the impact of exchange rate movements on the domestic prices, both aggregated and disaggregated levels, by pursuing either monetary policy credibility or inflation targeting.

Previous studies on the ERPT literature in the Asia region or for emerging countries focus mainly on the aggregated data of the CPI. Previous studies were conducted before the global financial crisis in 2008/2009. The current paper is the first of its kind to examine the pass-through from exchange rates to consumer prices in Vietnam using both aggregated and disaggregated data.

This paper investigates the role of the border in Canadian and U.S. prices, based on a sample of highly disaggregated city-level retail prices. It finds substantial short-run differences in cross-border prices. While most of these are eliminated over time, long-run differences in the cross-border prices remain. These long-run cross-border differences average just over 20%, compared to mean long-run intranational price gaps of 7–9%. Short-run price differences are eliminated at similar rates in the cross-border and intranational data. Evidence from national average prices suggests the gap between cross-border prices has not narrowed during the recent depreciation of the Canadian dollar.

The purpose of this paper is to analyze the oil price pass‐through into consumer price inflation for a developing country: Malaysia. The focus is on whether aggregate consumer prices and different consumer price components or sub‐price indexes are related in different ways to oil price in the long run and in the short run.

The analysis adopts the Phillips curve framework augmented to include the oil price. In modeling, a proper consideration is given to the integration and cointegration properties of the variables under consideration. Moreover, the asymmetric effects of oil price changes are also examined.

The paper finds evidence for a long run relation or cointegration of the oil price with only the aggregate consumer price and food price indexes. Moreover, in the short run, the oil price changes have significant bearings on the consumer price inflation, the food price inflation, the rent, fuel and power price inflation and the transportation and communication price inflation. In addition, the short‐run asymmetry in the oil price – food price inflation is also evident. Finally, the authors observe the neutrality of the medical care and health price index to the oil price changes.

The result that the inflationary consequence of oil price hikes is likely to work mainly through the food prices has important implications on the effects of oil price changes on the poor and policy directions to contain inflation.

The paper contributes to existing literature that has a predominant focus on the inflationary effect of oil prices at the aggregate level by looking at the relations between oil price and disaggregated good prices in the long run, short run, or both.

This paper aims at providing a new point of view in the comparison between the sectoral specialization of Italian firms and that of companies of some emerging countries, both apparently concentrating on so‐called traditional sectors. What is argued in this paper is that, even if belonging to the same product category, goods produced by Italian and emerging countries' firms differ strongly in terms of quality, and that the competitive advantage of the Italian companies is mainly based on their capacity of exporting “intangible‐intensive goods”.

The study is based on the comparison between Italian and a selected group of emerging countries' (Brazil, China, India, Malaysia, Mexico, Thailand and Vietnam) exports of fashion‐related goods to the American market by means of a new index, called the RUPD (revealed unit price differential). The index is based on the comparison between the average export prices of Italian and of the selected emerging countries' fashion goods (at a five‐digit level). The RUPD “reveals” ex post how much more a consumer has been shown to be willing to pay for a specific good in comparison to another good sold on the same market, belonging to the same category and produced in another country (or group of countries). If the RUPD is calculated using sufficiently disaggregated data (at least at the four‐ or five‐digit level) we can hypothesize that such an index can actually reflect how different consumers perceive a product in comparison with another one, implicitly considering it as non‐homogeneous and non‐substitutable.

The analysis of RUPDs between Italy and the selected emerging countries shows that most Italian fashion goods are sold on the American market at much higher prices. The relative weight of sectors with higher RUPD has been rising over the years, with a growing number of products showing an increasing unit price differential between Italian products and those from emerging countries. Furthermore, many sectors maintain a high RUPD for the whole period considered (2000‐2009). This allows the authors to argue that in these fashion sectors American consumers perceive substantial differences between Italian and emerging countries' goods that are primarily intangible.

Relevant insights can be drawn by adding to the analysis the evolution of market shares. The final part of the article presents a first exercise in this direction that seems to suggest interest for further analysis.

The analysis carried out in this article suggests that one way to face growing competition with emerging actors is not just to move towards high‐tech sectors. Even if operating in traditional sectors, Italian firms still offer excellence goods that are appreciated in international markets. For this scenario to be sustainable in the future, there are three suggested strategies: to continue to invest in R&D and innovation (also and especially in times of crisis) in order to maintain high levels of excellence; to strengthen marketing capacities (quality differentials have to be perceived and appreciated by consumers); and giving great importance to the utilization of the available intellectual property rights protection tools, since intangible‐intensive goods are particularly easy to imitate.

In the last few years, companies in highly industrialized countries have been seriously threatened by high competitive pressure coming from firms in new emerging countries. For this reason, many observers suggest that firms in advanced countries should reposition their production towards high‐tech sectors. The analysis carried out in this article suggests that a different perspective can originate different results, on the basis of which different strategies can and should be pursued in order for firms – even if operating in traditional sectors – to maintain a competitive advantage in international markets.