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Measures of Prices and Price Competitiveness in International Trade in Manufactured Goods

In: International Economic Transactions: Issues in Measurement and Empirical Research

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  • Robert E. Lipsey
  • Linda Molinari
  • Irving B. Kravis

Abstract

The purpose of this paper is to present, and to explain the construction of, a set of price indexes relating to international trade in manufactured goods. These include: 1. Indexes of export prices for the U.S., Germany, and Japan, based on their weights, and indexes of competitors' prices for each of those countries based on the sane set of weights; 2. Indexes of domestic prices for the U. S., Germany, and Japan based on export weights; 3. Indexes for developed country exports of manufactures based on weights of developed country exports of manufactures to developing countries and of total developed country exports of manufactures, and indexes for exports of the U.S., Germany, and Japan on the sane sets of weights. The indexes for developed country exports make use of a method for estimating missing prices that takes account not only of contemporaneous price changes in the same country within the sane community groups, but also of price changes for the particular commodity in other countries. Comparisons are made between movements of domestic and export prices and between price indexes based on weights of early and late base years. In addition, an attempt is made to correct the price indexes for changes in the quality of some manufactured goods not usually taken account of in measures of export or import prices.
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Suggested Citation

  • Robert E. Lipsey & Linda Molinari & Irving B. Kravis, 1991. "Measures of Prices and Price Competitiveness in International Trade in Manufactured Goods," NBER Chapters,in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 144-199 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:8430
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    References listed on IDEAS

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    1. repec:ucp:bknber:9780226304557 is not listed on IDEAS
    2. Richard C. Marston, 1989. "Pricing to Market in Japanese Manufacturing," NBER Working Papers 2905, National Bureau of Economic Research, Inc.
    3. repec:wsi:wschap:9789814749589_0001 is not listed on IDEAS
    4. Irving B. Kravis & Robert E. Lipsey, 1971. "Price Competitiveness in World Trade," NBER Books, National Bureau of Economic Research, Inc, number krav71-1.
    5. Robert E. Lipsey, 1963. "Introduction to "Price and Quantity Trends in the Foreign Trade of the United States"," NBER Chapters,in: Price and Quantity Trends in the Foreign Trade of the United States, pages 3-7 National Bureau of Economic Research, Inc.
    6. Sven W. Arndt & J. David Richardson, 1987. "Real-Financial Linkages Among Open Economies," NBER Working Papers 2230, National Bureau of Economic Research, Inc.
    7. Baldwin, Richard, 1988. "Hyteresis in Import Prices: The Beachhead Effect," American Economic Review, American Economic Association, vol. 78(4), pages 773-785, September.
    8. Angermann, Oswald, 1980. "External Terms of Trade of the Federal Republic of Germany Using Differing Methods of Deflation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 26(4), pages 367-385, December.
    9. Kravis, Irving B & Lipsey, Robert E, 1982. "Prices and Market Shares in the International Machinery Trade," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 110-116, February.
    10. Dornbusch, Rudiger, 1987. "Exchange Rates and Prices," American Economic Review, American Economic Association, vol. 77(1), pages 93-106, March.
    11. Summers, Robert, 1973. "International Price Comparisons Based Upon Incomplete Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 19(1), pages 1-16, March.
    12. John Norsworthy & Show-Ling Jang, 1993. "Cost Function Estimation of Quality Change in Semiconductors," NBER Chapters,in: Price Measurements and Their Uses, pages 125-156 National Bureau of Economic Research, Inc.
    13. Morris Goldstein & Mohsin S. Khan, 2017. "Income and Price Effects in Foreign Trade," World Scientific Book Chapters,in: TRADE CURRENCIES AND FINANCE, chapter 1, pages 3-81 World Scientific Publishing Co. Pte. Ltd..
    14. Kenichi Ohno, 1989. "Export Pricing Behavior of Manufacturing: A U.S.: Japan Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 36(3), pages 550-579, September.
    15. Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1.
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    Cited by:

    1. Lourdes Martín & Diego Rodríguez, 2004. "Pricing to market at firm level," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(2), pages 302-320, June.
    2. Jaime R. Marquez & Charles P. Thomas & Corinne Land, 2012. "International relative price levels: a look under the hood," International Finance Discussion Papers 1055, Board of Governors of the Federal Reserve System (U.S.).
    3. Swift, Robyn, 2004. "The pass-through of exchange rate changes to the prices of Australian exports of dairy and livestock products," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 0(Issue 1), pages 1-27.
    4. Athukorala, Premachandra & Menon, Jayant, 1995. "Modeling manufactured imports: Methodological issues with evidence from Australia," Journal of Policy Modeling, Elsevier, vol. 17(6), pages 667-675, December.
    5. Aw, Bee Yan & Batra, Geeta & Roberts, Mark J., 2001. "Firm heterogeneity and export-domestic price differentials: A study of Taiwanese electronics products," Journal of International Economics, Elsevier, vol. 54(1), pages 149-169, June.
    6. Michael Freudenberg & Harald Trabold, 1999. "Vertikale Produktdifferenzierung im Außenhandel: Theoretische Grundlagen und empirischer Befund," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 68(3), pages 356-385.
    7. Magnus Blomström & Linda S. Goldberg, 2001. "Introduction to "Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey"," NBER Chapters,in: Topics in Empirical International Economics: A Festschrift in Honor of Robert E. Lipsey, pages 1-14 National Bureau of Economic Research, Inc.
    8. Roberto Cellino & Anna Soci, 2002. "Pop competitiveness," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 55(220), pages 71-101.
    9. Jayant Menon, 1993. "Import Price and Activity Elasticities for the MONASH Model: Johansen FIML Estimation of Cointegration Vectors," Centre of Policy Studies/IMPACT Centre Working Papers ip-58, Victoria University, Centre of Policy Studies/IMPACT Centre.
    10. Yushi Yoshida, 2009. "Market Share and Exchange Rate Pass-through:Competition among Exporters of the Same Nationality," Discussion Papers 37, Kyushu Sangyo University, Faculty of Economics.
    11. Barber, Brad M. & Click, Reid W. & Darrough, Masako N., 1999. "The impact of shocks to exchange rates and oil prices on U.S. sales of American and Japanese automakers," Japan and the World Economy, Elsevier, vol. 11(1), pages 57-93, January.
    12. Yoshida, Yushi, 2010. "New evidence for exchange rate pass-through: Disaggregated trade data from local ports," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 3-12, January.
    13. Athukorala, Prema-chandra & Khan, Fahad, 2016. "Global production sharing and the measurement of price elasticity in international trade," Economics Letters, Elsevier, vol. 139(C), pages 27-30.
    14. Charles P. Thomas & Jaime R. Marquez & Sean Fahle, 2008. "Measuring U.S. international relative prices: a WARP view of the world," International Finance Discussion Papers 917, Board of Governors of the Federal Reserve System (U.S.).
    15. Jacqueline Dwyer & Christopher Kent & Andrew Pease, 1993. "Exchange Rate Pass-through: The Different Responses of Importers and Exporters," RBA Research Discussion Papers rdp9304, Reserve Bank of Australia.
    16. Linda S. Goldberg, 1990. "Nominal Exchange Rate Patterns: Correlationswith Entry, Exit, and Invesment in U.S. Industry," NBER Working Papers 3249, National Bureau of Economic Research, Inc.

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