We also realized an exercise imposing the limitation that private wages do not have full
indexation: wt = wt-1 + 0.9*Dpt-1. Figure 4 shows that in this case, pass-through is much
smaller in the long run. Nonetheless, this effect is not large in the first two years. Of
course, this scenario assumes that private wages will permanently bear the cost of a
higher nominal exchange rate, which is not realistic.