<p>Export/import inflation is an inflation caused by exchange rate movements.</p>
<p>For example, if there is some country A that does not have any oil production and imports oil from country B, then an appreciation of country's B currency will make oil in country A more expensive. This, ceteris paribus, will make all oil intensive products produced in A more expensive.</p>
<p>Inflation, is change in price level, if broad range of products gets more expensive inflation increases. If this is due to changes in exchange rate like in example above we would say the inflation is exported/imported (depending on what side you are looking at).</p>

CC BY-SA 4.0
2024-05-16T09:50:39.907Z
I also read that exported inflation is about movements of excess money supply from country A to country B.  (country A lends money to country B). Do you know anything about it? Thanks. @1muflon1
Mike_bb
CC BY-SA 4.0
2024-05-16T09:56:48.290Z
@Mike_bb you would have to elaborate on that what exactly you mean by movement of money supply? High powered money is supplied by central bank and broad money by all banking system in a particular country, I am not sure what exactly you mean by movement of money supply.
1muflon1
CC BY-SA 4.0
2024-05-16T10:04:35.730Z
I mean that central bank in country A can issue money and move emission to other country B (it will be debt of country B).
Mike_bb
CC BY-SA 4.0
2024-05-16T10:21:02.353Z
@Mike_bb that also has only effect through exchange rate, in that case CB in A cannot directly buy debt of B, It has to first exchange the new issued money at exchange rate to buy debt denominated in the currency of B. This causes exchange rate fluctuations that then can cause the import/export inflation.
1muflon1
CC BY-SA 4.0
2024-05-16T10:57:47.507Z
What are exchange rate fluctuations in this case? @1muflon1
Mike_bb
CC BY-SA 4.0
2024-05-16T11:47:26.667Z
@Mike_bb what you describe would lead in depreciation of A currency and appreciation of B currency
1muflon1
CC BY-SA 4.0
2024-05-16T13:04:20.233Z
CB in A can buy debt at current exchange rate. Can't it? @1muflon1
Mike_bb
CC BY-SA 4.0
2024-05-16T13:23:42.930Z
@Mike_bb exchange rate is not something that is fixed (unless you are specifically talking about some country with fixed exchange rate), the more people buy the higher price is. Yes when you as an individual go to an exchange rate window on an airport the prices there are fixed (at least within a day or couple of hours), but they at the airport would not exchange you literally millions or billions of unit of currency, and its fixed there due to price stickiness at that local level. On international markets large orders move prices quickly. Also forex works on international level
1muflon1
CC BY-SA 4.0
2024-05-16T13:28:24.327Z
works similarly like stock exchange, there are various people buying and selling at the same time and when you have large order you need to deal with multiple people, its not like grocery store.
1muflon1
CC BY-SA 4.0
2024-05-16T13:35:35.110Z
Can CB in A offer large money supply simultaneously with large debt owner? I read that it's possible that CB can coordinate the moment of buy/sell currency. @1muflon1
Mike_bb
CC BY-SA 4.0
2024-05-16T14:07:17.747Z
@Mike_bb in the same way as anyone can that does not mean that under floating exchange rate they can do it without changing price
1muflon1
CC BY-SA 4.0
2024-05-16T16:19:57.557Z
@Mike_bb it won’t be countries themselves but some people or institutions. For example, if CB wants to buy for example 100mil of currency B they will make a bid on a market. Then at the same market there are other people/institutions making bids. Then there are people and institutions who sell who submit their asks. Then the owner of exchange matches bids and asks based on certain rules and sometimes simply match cannot be made because bid is too low or ask is too high. So then people change their bids and asks and so on until everyone is satisfied. During this process prices change
1muflon1
CC BY-SA 4.0
2024-05-16T16:20:21.667Z
When someone sees someone else is putting big order they might ask for more etc
1muflon1
CC BY-SA 4.0
2024-05-17T05:58:50.350Z
You wrote that "what you describe would lead in depreciation of A currency and appreciation of B currency"

But I thought up example: Let supply of currency A = 10mil and currency B = 5mil on the forex. Exchange rate = 2/1. Let's increase supply of currency B + 1mil (1mil = debt of B). Exchange rate = 10/6. Let's increase currency A +2mil. Exchange rate = 2/1. It means that We can buy debt of B at exchange rate 2/1. We get that there is no depreciation of A currency and appreciation of B currency as you wrote. @1muflon1
Mike_bb
CC BY-SA 4.0
2024-05-17T08:50:50.017Z
@Mike_bb I don’t understand your example. Here are the steps. 1. CB in A has to create new money and supply them to the market. This shifts supply curve to the right. Demand curve is not affected. Result is lower value of currency A. Then at the market CBA buys currency of country B, that shifts demand for currency B to the right while supply of currency B is not affected. That leads to appreciation of B currency. Then CBA with the currency B can buy debt of B. These are all the steps required for A to buy B debt.
1muflon1
CC BY-SA 4.0
2024-05-16T09:41:37.027Z
2024-05-16T09:41:37.027Z
1muflon1
<p>I read in some articles that there are such notions as &quot;exported inflation&quot; and &quot;imported inflation&quot;.</p>
<p>But it was not written about in detail.</p>
<p>What are exported inflation and imported inflation?
What do examples exist?</p>
<p>Thanks!</p>

<inflation><monetary-policy><money-supply>
What are exported inflation and imported inflation?
Mike_bb
# What are exported inflation and imported inflation?

(Asked by: username_0 on 2024-05-16)

I read in some articles that there are such notions as "exported inflation" and "imported inflation".

But it was not written about in detail.

What are exported inflation and imported inflation?
What do examples exist?

Thanks!

**Tags:** inflation, monetary-policy, money-supply


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## 1 answers

### Answer by username_1 on 2024-05-16. Score: 1 | Accepted answer

Export/import inflation is an inflation caused by exchange rate movements.

For example, if there is some country A that does not have any oil production and imports oil from country B, then an appreciation of country's B currency will make oil in country A more expensive. This, ceteris paribus, will make all oil intensive products produced in A more expensive.

Inflation, is change in price level, if broad range of products gets more expensive inflation increases. If this is due to changes in exchange rate like in example above we would say the inflation is exported/imported (depending on what side you are looking at).

> **Comments:**
> **username_0**: I also read that exported inflation is about movements of excess money supply from country A to country B.  (country A lends money to country B). Do you know anything about it? Thanks. @username_1  
> **username_1**: @username_0 you would have to elaborate on that what exactly you mean by movement of money supply? High powered money is supplied by central bank and broad money by all banking system in a particular country, I am not sure what exactly you mean by movement of money supply.  
> **username_0**: I mean that central bank in country A can issue money and move emission to other country B (it will be debt of country B).  
> **username_1**: @username_0 that also has only effect through exchange rate, in that case CB in A cannot directly buy debt of B, It has to first exchange the new issued money at exchange rate to buy debt denominated in the currency of B. This causes exchange rate fluctuations that then can cause the import/export inflation.  
> **username_0**: What are exchange rate fluctuations in this case? @username_1  
> **username_1**: @username_0 what you describe would lead in depreciation of A currency and appreciation of B currency  
> **username_0**: CB in A can buy debt at current exchange rate. Can't it? @username_1  
> **username_1**: @username_0 exchange rate is not something that is fixed (unless you are specifically talking about some country with fixed exchange rate), the more people buy the higher price is. Yes when you as an individual go to an exchange rate window on an airport the prices there are fixed (at least within a day or couple of hours), but they at the airport would not exchange you literally millions or billions of unit of currency, and its fixed there due to price stickiness at that local level. On international markets large orders move prices quickly. Also forex works on international level  
> **username_1**: works similarly like stock exchange, there are various people buying and selling at the same time and when you have large order you need to deal with multiple people, its not like grocery store.  
> **username_0**: Can CB in A offer large money supply simultaneously with large debt owner? I read that it's possible that CB can coordinate the moment of buy/sell currency. @username_1  
> **username_1**: @username_0 in the same way as anyone can that does not mean that under floating exchange rate they can do it without changing price  
> **username_1**: @username_0 it won’t be countries themselves but some people or institutions. For example, if CB wants to buy for example 100mil of currency B they will make a bid on a market. Then at the same market there are other people/institutions making bids. Then there are people and institutions who sell who submit their asks. Then the owner of exchange matches bids and asks based on certain rules and sometimes simply match cannot be made because bid is too low or ask is too high. So then people change their bids and asks and so on until everyone is satisfied. During this process prices change  
> **username_1**: When someone sees someone else is putting big order they might ask for more etc  
> **username_0**: You wrote that "what you describe would lead in depreciation of A currency and appreciation of B currency"  But I thought up example: Let supply of currency A = 10mil and currency B = 5mil on the forex. Exchange rate = 2/1. Let's increase supply of currency B + 1mil (1mil = debt of B). Exchange rate = 10/6. Let's increase currency A +2mil. Exchange rate = 2/1. It means that We can buy debt of B at exchange rate 2/1. We get that there is no depreciation of A currency and appreciation of B currency as you wrote. @username_1  
> **username_1**: @username_0 I don’t understand your example. Here are the steps. 1. CB in A has to create new money and supply them to the market. This shifts supply curve to the right. Demand curve is not affected. Result is lower value of currency A. Then at the market CBA buys currency of country B, that shifts demand for currency B to the right while supply of currency B is not affected. That leads to appreciation of B currency. Then CBA with the currency B can buy debt of B. These are all the steps required for A to buy B debt.  

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