Import Price Formation and Pricing to Market: A Test on Norwegian Data
AbstractThis paper investigates the determinants of Norwegian import prices of manufactures over the period 1970(1) - 1991(4). Multivariate cointegration analysis establishes a long-run relationship between import prices, foreign prices, the exchange rate and domestic unit labour costs. Normalized on import prices, the long-run elasticities are 0.63 (foreign prices and the exchange rate) and 0.37 (domestic costs). Deviations from this relationship are highly significant in a structural import price equation, which also contains positive effects of growth in domestic demand and inflation, as well as a negative effect from the Norwegian unemployment rate. The estimated parameters appear reasonably stable within the sample.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 157.
Date of creation: Nov 1995
Date of revision:
Import price formation; pricing to market; domestic effects; Johansen procedure; structural error correction model; super exogeneity.;
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- Sverre Grepperud, 1997. "Soil Depletion Choices under Production and Price Uncertainty," Discussion Papers 186, Research Department of Statistics Norway.
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