Dynamic Modelling of Domestic Prices with Time-varying Elasticities and Rational Expectations

Arbeitspapier

The paper analyses the price on domestic market for an aggregate commodity produced by Norwegian private mainland economy. The long-run solution is modelled assuming imperfect competition. The elasticities with respect to unit labour costs and competing prices vary with an indicator for competitive strength in domestic market. I consider two models for the dynamic part of the equation. Model A is a conditional ECM in current and lagged variables. Model B is derived from a multiperiod quadratic loss function which introduces rational expectations to the model. The backward-forward restrictions are not rejected. The estimated elasticities for both models are in line with the previous empirical results for the Norwegian economy. Model A is preferred to Model B, partly on the basis of informal encompassing results.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Discussion Papers ; No. 151

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Expectations; Speculations
• Thema: Domestic prices ; Imperfect competition ; Time-varying elasticities ; Multiperiod loss function ; Rational expectations ; Error correction models

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Svendsen, Ingvild
• Ereignis: Veröffentlichung
• (wer): Statistics Norway, Research Department
• (wo): Oslo
• (wann): 1995

Weitere Informationen

• Handle: http://hdl.handle.net/10419/192135
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ