Adjustment to Variations in Imported Input Prices: The Role of Economic Structure
This paper introduces an imported input into a model of art open economy with developed financial markets, a flexible exchange rate, and some degree of market power on the export side. The model is designed to investigate the impact of an increase in imported input prices on the exchange rate, domestic interest rate, income and nontraded-goods prices. The analysis reveals that changes in various structural parameters, such as the degree of market power or the extent of demand-side openness" or "financial openness," alter the transmission of foreign price disturbances to the domestic economy.
|Date of creation:||Jul 1980|
|Date of revision:|
|Publication status:||published as Katseli-Papaefstratiou, L. and Marion, Nancy Peregrim. "Adjustment to Variations in Imported Input Prices: The Role of Economic Structure." Weltwirtschaftliches Archiv (Review of World Economics), Vol. 1, No. (Band) 118, (1982), pp. 131-147.|
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- Buiter, Willem H, 1978. "Short-run and Long-run Effects of External Disturbances under a Floating Exchange Rate," Economica, London School of Economics and Political Science, vol. 45(179), pages 251-72, August.
- Ronald E. Findlay & Carlos Alfredo Rodriguez, 1977. "Intermediate Imports and Macroeconomic Policy under Flexible Exchange Rates," Canadian Journal of Economics, Canadian Economics Association, vol. 10(2), pages 208-17, May.
- Flood, Robert P & Marion, Nancy Peregrim, 1982.
"The Transmission of Disturbances under Alternative Exchange-Rate Regimes with Optimal Indexing,"
The Quarterly Journal of Economics,
MIT Press, vol. 97(1), pages 43-66, February.
- Robert P. Flood & Nancy Peregrim Marion, 1980. "The Transmission of Disturbances under Alternative Exchange-Rate Regimeswith Optimal Indexing," NBER Working Papers 0500, National Bureau of Economic Research, Inc.
- Kouri, Pentti J K, 1976. " The Exchange Rate and the Balance of Payments in the Short Run and in the Long Run: A Monetary Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 78(2), pages 280-304.
- Branson, William H. & Katseli-Papaefstratiou, Louka T., 1980. "Income instability, terms of trade, and the choice of exchange rate regime," Journal of Development Economics, Elsevier, vol. 7(1), pages 49-69, February.
- Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
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