THE IMPACT OF A CHANGE IN EXCHANGE-RATE PASS-THROUGH ON UNITED-STATESIMPORTS

One import demand equation is specified that is potentially affected b y a breakdown in pass-through and one that is not. From the difference in the forecasts of these two equations an upper-bound estimate is de rived for the impact on U. S. non-oil imports of the breakdown in exch ange rate pass-through during the 1980s. The empirical evidence sugges ts that exchange rate pass-through may have changed after 1985. Withou t this shift in pass-through U. S. non-oil imports may have been a max imum of 15 percent lower by 1990.