CURRENCY FLUCTUATIONS AND PRICING. BEHAVIORAL RESPONSES OF CONSUMERS IN INTERNATIONAL TRADE

Abstract

This article is devoted to a comprehensive study of the mechanisms of interaction between currency fluctuations, pricing, and consumer behavioral responses in the international trade system. The relevance of the study is due to the fact that the full-scale invasion of Ukraine by the Russian Federation in February 2022 caused unprecedented currency shocks, which affected the open economy and revealed systemic vulnerabilities in pricing mechanisms and consumer behavior. In the context of the rapid devaluation of the hryvnia, the introduction of administrative currency restrictions, and the parallel functioning of official and market exchange rates, classical models of consumer choice have revealed significant explanatory inadequacies. Accordingly, there remains a pressing need for a behavioral-economic understanding of the observed phenomena. The article systematically examines the theory of the effect of exchange rate pass-through to consumer prices, the mechanisms of formation and anchoring of inflation expectations, the role of cognitive biases in the perception of price changes, as well as the adaptation strategies of economic agents and households in a volatile external environment. Particular attention is paid to the asymmetry of the pass-through effect: prices react more intensely and quickly to devaluation than to revaluation, which creates a persistent asymmetry in consumers' perception of price changes. The results of the study show that consumer behavioral responses are predictable from the perspective of D. Kahneman and A. Tversky's prospect theory and the framing effect. It has been established that effective management of price expectations requires the integration of behavioral tools into the communication strategy of central banks and enterprises participating in international trade. The scientific novelty lies in the systematization of behavioral determinants of price perception in the context of currency fluctuations in an open economy during wartime.