In this paper I have addressed three of this issues: (a) the relationship between the
pass-through and the effectiveness of nominal exchange rates in IT regimes; (b) the
effects of IT on exchange rate volatility; and (c) the role (or potential role) of exchange
rate changes on the monetary rule in IT countries. The main findings from this analysis
may be summarized as follows: (1) Countries that have adopted IT have experienced a
declined in the pas-through from exchange rate changes to inflation. In many of the
countries in the sample this decline in the pass-through has been different from CPI
inflation than for PPI inflation. There is no evidence, however, of changes in the degree
of effectiveness of the nominal exchange rate as a shock absorber. (2) The adoption of
IT monetary policy procedures has not resulted in an increase in (nominal or real)