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Abstract
The paper examines the extent to which exchange rate and unit tariff changes are passed-through in US import prices of
unmanufactured Greek oriental tobacco. The results indicate partial pass-through of exchange rates and tariffs. Exchange rate
pass-through is about 0.272 and tariff pass-through about 0.185. One possible reason for the partial pass-through is oligopoly
in tobacco exporting. Oligopoly would imply that depreciation of the drachma relative to the US dollar benefits tobacco
exporters operating in Greece. A second possible reason is a possible correlation between exchange rates premiums paid to
tobacco exporters in previous agricultural policies. An important implication of this possible correlation is that Greek tobacco
prices may be more sensitive to exchange rate changes under the current agricultural policy. ©1999 Elsevier Science B.V. All
rights reserved.