The pass-through effect refers to extent that import prices and export prices adjust to currency devaluation.

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The pass-through effect is the extent to which changes in exchange rates affect the prices of imported and exported goods. Specifically, it refers to how much of a currency devaluation or appreciation is passed through to import and export prices. A higher pass-through means that import and export prices are more sensitive to changes in exchange rates, while a lower pass-through means that prices are less sensitive.

The Pass-Through Effect Refers to Extent That Import Prices and Export