The linkage between the import prices and the exchange rate is an important topic in the open economy macroeconomics. However, there is a few literature focusing on the elasticity of the import prices with respect to the exchange rate especially in Finland. The aim of this study is to estimate the Exchange Rate Pass-through (ERPT) on the aggregated Finnish import prices. With the time series of Finnish Import Price Index, the aggregated foreign Producer Price Index and the aggregated foreign exchange rate index from 2001 to 2017, the analysis suggests the short-term ERPT on Finnish import prices is 36.3% and the long-term ERPT is 70.7%. Finland’s domestic demand has little impact on the short-term ERPT on Finnish import prices, while it likely reduces ERPT by 1 to 5 percentage points in long term.
