Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis
By letting prices be determined entirely by the requirements of macroeconomic equilibrium, flexible-price models bypass the issues of how prices and wages are set in the short run and whether there is any direct linkage between domestic price and wage formation and the levels of prices and wages int...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Associazione Economia civile
2014-01-01
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| Series: | PSL Quarterly Review |
| Subjects: | |
| Online Access: | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11533 |
| _version_ | 1811172538105987072 |
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| author | A.V. DEARDORFF R.M. STERN |
| author_facet | A.V. DEARDORFF R.M. STERN |
| author_sort | A.V. DEARDORFF |
| collection | DOAJ |
| description | By letting prices be determined entirely by the requirements of macroeconomic equilibrium, flexible-price models bypass the issues of how prices and wages are set in the short run and whether there is any direct linkage between domestic price and wage formation and the levels of prices and wages internationally. This paper deals with such direct linkages between international and domestic prices and wages. Aside from a few papers, there appears to have been little effort made to account for international influences on domestic price formation at the theoretical macroeconomic level. The authors first offer a brief theoretical discussion of international price relationships. An analysis of empirical evidence as contained in several large national econometric models is then carried out.
JEL: E31, E24, E37
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| first_indexed | 2024-04-10T17:32:55Z |
| format | Article |
| id | doaj.art-d9b2fae7006843a59f3321ba22b1e6a6 |
| institution | Directory Open Access Journal |
| issn | 2037-3635 2037-3643 |
| language | English |
| last_indexed | 2024-04-10T17:32:55Z |
| publishDate | 2014-01-01 |
| publisher | Associazione Economia civile |
| record_format | Article |
| series | PSL Quarterly Review |
| spelling | doaj.art-d9b2fae7006843a59f3321ba22b1e6a62023-02-03T16:44:29ZengAssociazione Economia civilePSL Quarterly Review2037-36352037-36432014-01-013112710.13133/2037-3643/11533Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysisA.V. DEARDORFFR.M. STERNBy letting prices be determined entirely by the requirements of macroeconomic equilibrium, flexible-price models bypass the issues of how prices and wages are set in the short run and whether there is any direct linkage between domestic price and wage formation and the levels of prices and wages internationally. This paper deals with such direct linkages between international and domestic prices and wages. Aside from a few papers, there appears to have been little effort made to account for international influences on domestic price formation at the theoretical macroeconomic level. The authors first offer a brief theoretical discussion of international price relationships. An analysis of empirical evidence as contained in several large national econometric models is then carried out. JEL: E31, E24, E37 https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11533Priceswagesshort-run determinants of price formationdomestic and international linkageseconometric model |
| spellingShingle | A.V. DEARDORFF R.M. STERN Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis PSL Quarterly Review Prices wages short-run determinants of price formation domestic and international linkages econometric model |
| title | Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis |
| title_full | Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis |
| title_fullStr | Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis |
| title_full_unstemmed | Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis |
| title_short | Modeling the effects of foreign prices on domestic price determination: some econometric evidence and implications for theoretical analysis |
| title_sort | modeling the effects of foreign prices on domestic price determination some econometric evidence and implications for theoretical analysis |
| topic | Prices wages short-run determinants of price formation domestic and international linkages econometric model |
| url | https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/11533 |
| work_keys_str_mv | AT avdeardorff modelingtheeffectsofforeignpricesondomesticpricedeterminationsomeeconometricevidenceandimplicationsfortheoreticalanalysis AT rmstern modelingtheeffectsofforeignpricesondomesticpricedeterminationsomeeconometricevidenceandimplicationsfortheoreticalanalysis |