Money demand and the relative price of capital goods in hyperinflations

1995 ◽  
Vol 36 (2) ◽  
pp. 375-404 ◽  
Author(s):  
Ellis W. Tallman ◽  
Ping Wang
Keyword(s):  
Money Demand ◽  
Relative Price ◽  
Capital Goods

Watersheds and Turning Points: Conjectures on the Long-Term Impact of Civil War Financing

1974 ◽  
Vol 34 (3) ◽  
pp. 636-661 ◽  
Author(s):  
Jeffrey G. Williamson
Keyword(s):  
Civil War ◽  
Price Change ◽  
Turning Points ◽  
Capital Formation ◽  
Relative Price ◽  
Capital Goods ◽  
Saving Rates ◽  
Long Term Impact ◽  
Investment Goods

What accounts for the “epochal” changes in capital formation shares and capital goods' prices during the 1860's? The pages following document an epochal rise in American gross saving rates centered on the Civil War decade. They also establish a symmetrical episodic shift in the relative price of manufactured durable investment goods. Not only did the American investment share in GNP rise dramatically (and permanently) between the 1850's and 1870's, but the relative price of capital goods declined sharply over the same period. This relative price change was pronounced and it was never again repeated in a subsequent century of development.

scholarly journals The Rise and Fall of India’s Relative Investment Price: A Tale of Policy Error and Reform

2022 ◽  
Vol 14 (1) ◽  
pp. 146-178
Author(s):  
Alok Johri ◽  
Md Mahbubur Rahman
Keyword(s):  
Import Substitution ◽  
Relative Price ◽  
Capital Goods ◽  
Point Reduction ◽  
Tariff Rates ◽  
Import Restrictions ◽  
The Impact ◽  
Indian Data

India’s relative price of investment rose 44 percent from 1981 to 1991 and fell 26 percent from 1991 to 2006. We build a simple DGE model, calibrated to Indian data, in order to explore the impact of capital import substitution policies and their reform post-1991 in accounting for this rise and fall. Our model delivers a 23 percent rise before reform and a 31 percent fall thereafter. GDP per effective labor was 3 percent lower in 1991 compared to 1981 due to import restrictions on capital goods. Their removal, and a 71 percentage point reduction in tariff rates, raised GDP per effective labor permanently by 20 percent. (JEL E22, E23, F13, O11, O16, O19)

scholarly journals The Price of Capital Goods

2019 ◽  
Vol 19 (134) ◽  
pp. 1 ◽  
Author(s):  
Weicheng Lian ◽  
Natalija Novta ◽  
Evgenia Pugacheva ◽  
Yannick Timmer ◽  
Petia Topalova
Keyword(s):  
Developing Economies ◽  
Emerging Market ◽  
Relative Price ◽  
Trade Integration ◽  
Capital Goods ◽  
The Past ◽  
Time Period ◽  
Cross Country ◽  
Investment Growth ◽  
Additional Channel

Over the past three decades, the price of machinery and equipment fell dramatically relative to other prices in advanced and emerging market and developing economies. Using cross-country and sectoral data, we show that the decline in the relative price of tangible tradable capital goods provided a significant impetus to the capital deepening that took place during the same time period. The broad-based decline in the relative price of machinery and equipment, in turn, was driven by the faster productivity growth in the capital goods producing sectors relative to the rest of the economy, and deeper trade integration, which induced domestic producers to lower prices and increase their efficiency. Our findings suggest an additional channel through which rising trade tensions and sluggish productivity could threaten real investment growth going forward.

Capital-Skill Complementarity and the Skill Premium in a Quantitative Model of Trade

2013 ◽  
Vol 5 (2) ◽  
pp. 72-117 ◽  
Author(s):  
Fernando Parro
Keyword(s):  
Technical Change ◽  
Quantitative Model ◽  
Trade Costs ◽  
Relative Price ◽  
Skill Premium ◽  
Unskilled Labor ◽  
Capital Goods ◽  
Trade Model ◽  
Skilled And Unskilled Labor ◽  
The Impact

Technological change has reduced the relative price of capital goods. Reductions in trade costs make it cheaper to import capital goods. With capital-skill complementarity, both can increase the skill premium. I construct a general-equilibrium trade model with capital-skill complementarity to study the impact of changing worldwide trade costs and technologies on the skill premium. The impacts of trade costs and technical change are comparable, especially in developing countries, and much larger than Stolper-Samuelson effects. I find that both skilled and unskilled labor gain from trade, and that larger gains from trade are associated with larger increases in the skill premium. (JEL E22, F11, F16, J24, O33)

Inventory-Theoretic Money Demand and Relative Price Dynamics

2013 ◽  
Vol 45 (2-3) ◽  
pp. 299-326
Author(s):  
HIROKAZU ISHISE NAO SUDO
Keyword(s):  
Money Demand ◽  
Relative Price ◽  
Price Dynamics

scholarly journals Are Capital Goods Tariffs Different?

2020 ◽  
Vol 20 (61) ◽  
Author(s):  
Sergii Meleshchuk ◽  
Yannick Timmer
Keyword(s):  
Natural Experiment ◽  
Rate Increase ◽  
Relative Price ◽  
Capital Goods ◽  
Trade Reform ◽  
Labor Share ◽  
Investment Rate ◽  
Investment Rates ◽  
Tariff Rates

In this paper we demonstrate the importance of distinguishing capital goods tariffs from other tariffs. Using exposure to a quasi-natural experiment induced by a trade reform in Colombia, we find that firms that have been more exposed to a reduction in intermediate and consumption input or output tariffs do not significantly increase their investment rates. However, firms’ investment rate increase strongly in response to a reduction in capital goods input tariffs. Firms do not substitute capital with labor, but instead also increase employment, especially for production workers. Reduction in other tariff rates do not increase investment and employment. Our results suggest that a reduction in the relative price of capital goods can significantly boost investment and employment and does not seem to lead to a decline in the labor share.

The Problem of Identifying and Modeling the Relationship between Monetary Factor and Inflation in the Russian Economy

2008 ◽  
pp. 61-76
Author(s):  
A. Porshakov ◽  
A. Ponomarenko
Keyword(s):  
Money Supply ◽  
Money Demand ◽  
Russian Economy ◽  
Long Run ◽  
Complex Approach ◽  
Wide Range ◽  
Long Time ◽  
The Relationship ◽  
Supply Side Factors

The role of monetary factor in generating inflationary processes in Russia has stimulated various debates in social and scientific circles for a relatively long time. The authors show that identification of the specificity of relationship between money and inflation requires a complex approach based on statistical modeling and involving a wide range of indicators relevant for the price changes in the economy. As a result a model of inflation for Russia implying the decomposition of inflation dynamics into demand-side and supply-side factors is suggested. The main conclusion drawn is that during the recent years the volume of inflationary pressures in the Russian economy has been determined by the deviation of money supply from money demand, rather than by money supply alone. At the same time, monetary factor has a long-run spread over time impact on inflation.

The Investment Climate in Russia

2006 ◽  
pp. 48-77
Author(s):  
Article Editorial
Keyword(s):  
Money Demand ◽  
State Level ◽  
Decision Making Process ◽  
Investment Climate ◽  
Operational Environment ◽  
Gdp Growth Rate ◽  
External Conditions ◽  
Potential Gdp ◽  
The Government ◽  
Economic Boom

During the last six years, exceptionally favourable external conditions for an upsurge of the domestic economy have been developed. However, they failed to result in an economic boom, which has been estimated by the authors as quite possible. One of the reasons for this - deterioration of the investment climate in the country that caused a decline of business activities and money demand decrease thus leading to reduction of potential GDP growth rate. The accumulated modernisation problems cannot be resolved without increasing the economic dynamics. But this requires an economic policy able to facilitate predictability of Russian business operational environment, to protect it legally, to secure a system of partnership relations with the government and to respect the interests of the main participants in the state level decision-making process concerning business undertakings and investment climate.

Competitive and Complementary Relations in International Travel: The Case of British Travel to Cyprus

2019 ◽  
Vol 10 (5) ◽  
pp. 395-420
Author(s):  
Petros Anastasopoulos ◽  
Keyword(s):  
Strong Association ◽  
International Travel ◽  
Relative Price ◽  
Annual Data ◽  
Export Demand ◽  
Relative Prices ◽  
Vector Error Correction ◽  
Vector Error ◽  
The Mediterranean ◽  
Demand Equations

This is an econometric analysis of demand for travel to Cyprus by Britons. We examined the competitive and complementary relations between travel to Cyprus and other well-established travel destinations in the Mediterranean basin. Because many package tours include several countries in their destinations within a given journey, and because individual travelers find it more advantageous to visit more than one country in a single trip, it may be meaningful to examine international travel within the contest of groups of countries rather than a single country competing for international travelers. Specifically, we provide an analysis of the competitive and complementary relations existing between the tourism sectors of Cyprus and that of Greece, Spain and Portugal for British travelers. We provide estimates of income and relative price elasticities based of export demand equations upon annual data from 1980-2016. We tested for the stationarity of the variables and derived estimates of the Vector Error Correction Model (VECM). These tests confirm a strong association between the incomes of Britons and their decision to travel to Cyprus. Furthermore, we show the relative prices between Cyprus and other competing destinations in the Mediterranean to play an important role in determining British travel to Cyprus.

Intersectoral Terms of Trade for Pakistan's Economy: 1970-71 - 1981-82

1987 ◽  
Vol 26 (1) ◽  
pp. 81-105
Author(s):  
Shahnaz Kazi
Keyword(s):  
Terms Of Trade ◽  
Relative Price ◽  
Price Ratio ◽  
Sectoral Output ◽  
The Relationship

The paper estimates intersectoral terms of trade for the period from 1970-71 to 1981-82. On the basis of these results the study further analyses the relationship between terms of trade and aggregate farm output over the period. The findings indicate some improvement in agriculture's terms of trade over the Seventies. However, no conclusive support is provided to the hypothesis of high supply responsiveness of aggregate farm output to shifts in the relative price ratio of sectoral output.

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