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Estimating the Accounting Price of Foreign Exchange: An Input-Output Approach

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  • Londero, Elio

Abstract

When adjustments in the foreign exchange market involve changes in the production of marginally traded goods, the traditional formula for calculating the accounting (shadow) price of foreign exchange assumes that domestic prices and marginal costs at efficiency prices for those goods are equal. In this paper a method is proposed for estimating an accounting price ratio of foreign exchange in a partial equilibrium framework, abandoning that assumption. For that purpose, input-output techniques are used, so as to take into account the effects of changes in the production of traded goods.

Suggested Citation

  • Londero, Elio, 1994. "Estimating the Accounting Price of Foreign Exchange: An Input-Output Approach," MPRA Paper 111727, University Library of Munich, Germany, revised 1994.
    • Handle: RePEc:pra:mprapa:111727
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    References listed on IDEAS

    as
    1. E. J. Mishan, 1980. "How Valid Are Economic Evaluations of Allocative Changes?," Journal of Economic Issues, Taylor & Francis Journals, vol. 14(1), pages 143-161, March.
    2. Londero, Elio, 1996. "Benefits and Beneficiaries: An Introduction to Estimating Distributional Effects in Cost-Benefit Analysis," IDB Publications (Books), Inter-American Development Bank, number 10164.
    3. Londero, Elio, 1987. "Benefits and Beneficiaries: An Introduction to Estimating Distributional Effects in Cost-Benefit Analysis (Second Edition)," MPRA Paper 60345, University Library of Munich, Germany, revised 1996.
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    More about this item

    Keywords

    cost-benefit analysis; shadow prices; accounting prices; input-output;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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