Asymmetric Adjustment Costs, Asymmetric Pricing and Employment: Evidence from the UK
AbstractThis paper uses an asymmetric multivariate model to investigate asymmetries in employment and pricing behaviour by firms. This generalises the approach of Granger and Lee (1989) and also exploits the cross equation restrictions on the equations for prices and employment implied by a restricted cost function--the dual to a Cobb-Douglas production function. Our results suggest that both prices and employment respond asymmetrically to shocks to costs and demand. Copyright 2001 by Scottish Economic Society.
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Bibliographic InfoArticle provided by Scottish Economic Society in its journal Scottish Journal of Political Economy.
Volume (Year): 48 (2001)
Issue (Month): 1 (February)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0036-9292
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- Arden, R. & Holly, S. & Turner, P., 1997. "Asymmetric Adjustment Costs, Asymmetric Pricing and Employment: Evidence from the UK," Cambridge Working Papers in Economics 9717, Faculty of Economics, University of Cambridge.
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- Cook, Steven & Holly, Sean & Turner, Paul, 1999. "The power of tests for non-linearity: the case of Granger-Lee asymmetry," Economics Letters, Elsevier, vol. 62(2), pages 155-159, February.
- Sean Holly & Paul Turner & Melvyn Weeks, 2003. "Asymmetric Adjustment and Bias in Estimation of an Equilibrium Relationship from a Cointegrating Regression," Computational Economics, Society for Computational Economics, vol. 21(3), pages 195-202, June.
- Christopher Martin & Michael Arghyrou & Costas Milas, 2004. "Nonlinear inflation dynamics: evidence from the UK," Money Macro and Finance (MMF) Research Group Conference 2003 59, Money Macro and Finance Research Group.
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