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Measuring the Interaction of Structural Changes with Inflation

Author

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  • Dobrescu, Emilian

    () (Romanian Academy, National Institute of Economic Forecasting)

Abstract

The paper is organized in four chapters. The first describes the methodological framework of the investigation, insisting on defining the sectoral changes and the relative prices, as well as on their interaction (as expectations and as real processes); the theoretical considerations are algebraically formalized in order to be analyzed statistically. The second chapter is devoted to the data problems, with emphasis on the configuration of input-output tables used in application and on the main trends identified in the structural evolution of the Romanian economy during 1989-2005. The third – as a main one – contains a detailed econometric analysis. The main assumption of the paper is that the downward price rigidity cannot be separated from the corresponding downward output rigidity. They represent an indestructible tandem. In other words, the downward price rigidity is intimately connected not only to the nominal wage low flexibility, but to the slow employment adjustments, too. This approach has many consequences. From this point of view, the orthogonal regression is admitted as a more suitable method as compared to the direct and the reverse OLS. The paper ends with a short set of concluding remarks, including possible extensions of this research.

Suggested Citation

  • Dobrescu, Emilian, 2009. "Measuring the Interaction of Structural Changes with Inflation," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(5), pages 5-99.
  • Handle: RePEc:rjr:romjef:v:6:y:2009:i:5:p:5-99
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    File URL: http://www.ipe.ro/rjef/rjef_sup_2009.pdf
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    References listed on IDEAS

    as
    1. Dobrescu, Emilian, 2011. "Sectoral Structure and Economic Growth," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-36, September.
    2. Giovagnoli, A. & Wynn, H.P., 2008. "Stochastic orderings for discrete random variables," Statistics & Probability Letters, Elsevier, vol. 78(16), pages 2827-2835, November.
    3. Dobrescu, Emilian, 2013. "Restatement of the I-O Coefficient Stability Problem," Working Papers of Macroeconomic Modelling Seminar 132601, Institute for Economic Forecasting.
    4. Tülin Erdem, 1996. "A Dynamic Analysis of Market Structure Based on Panel Data," Marketing Science, INFORMS, vol. 15(4), pages 359-378.
    5. A. B. Atkinson & F. Bourguignon, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 183-201.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dobrescu, Emilian, 2012. "Restatement of the I-O Coefficient Stability Problem," MPRA Paper 48567, University Library of Munich, Germany.
    2. Dobrescu, Emilian, 2013. "Modelling the Sectoral Structure of the Final Output," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 59-89.
    3. Dobrescu, Emilian, 2013. "Restatement of the I-O Coefficient Stability Problem," Working Papers of Macroeconomic Modelling Seminar 132601, Institute for Economic Forecasting.
    4. Emilian Dobrescu & Viorel Gaftea, 2012. "On the Accuracy of RAS Method in an Emergent Economy," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(32), pages 502-521, June.
    5. Emilian Dobrescu, 2013. "Restatement of the I-O Coefficient Stability Problem," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 2(1), pages 1-67, December.
    6. Saman, Corina & Pauna, Bianca, 2013. "New Keynesian Phillips Curve for Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 159-171.

    More about this item

    Keywords

    structural changes; relative prices; downward price rigidity; downward output rigidity; orthogonal regression;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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