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Intermediate Goods (intermediate + goods)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Monetary Policy in a Forward-Looking Input,Output Economy

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 4 2009
BRAD E. STRUM
inflation targeting; price-level targeting; intermediate goods This paper examines the implications for monetary policy of sticky prices in both final and intermediate goods in a New Keynesian model. Both optimal policy under commitment and discretionary policy under simple loss functions are studied. Household utility losses under alternative loss functions are compared; additionally, the robustness of policy performance to model and shock misperceptions and parameter uncertainty is examined. Targeting inflation in both consumer and intermediate goods performs better than targeting inflation in one sector; targeting price levels of both final and intermediate goods performs significantly better. Moreover, targeting price levels in both sectors yields superior robustness properties. [source]

Market Access and WTO Border Tax Adjustments for Environmental Excise Taxes under Imperfect Competition

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 4 2005
STEVE McCORRISTON
The literature identifies linkages between domestic environmental policies and trade, the treatment of imports being an important issue in administration of domestic environmental excise taxes. With the aim of ensuring foreign exporters do not attain a competitive advantage, border tax adjustments are used. Since most environmental excise taxes apply to intermediate goods, the relevant border tax adjustment applies to final imported goods. However, when both intermediate and final goods markets are oligopolistic, border tax adjustments may be non-neutral. Moreover, even if market access is unchanged, border tax adjustments can still lead to redistribution of profits between domestic and foreign firms. [source]

Fixed cost, marginal cost, and the decision to buy or make

MANAGERIAL AND DECISION ECONOMICS, Issue 3 2004
Charles E. Hegji
The paper builds a formal model of the costs and benefits of producing intermediate goods internally as compared to buying partially produced inputs on the open market. The model centers on the link between the purchase of assets specific to a production process and the mean and variance of profits from the purchase. The central point of the paper is that even though purchases of assets specific to a production process can have an ambiguous impact on profits of the decision to make, the purchase of such assets has a tendency to reduce the variability of profits. This trade-off is at the heart of decision to buy or make. Copyright © 2004 John Wiley & Sons, Ltd. [source]

THE DIVISION OF LABOR AND ROUNDABOUT PRODUCTION: ALLYN YOUNG REVISITED

PACIFIC ECONOMIC REVIEW, Issue 3 2003
Guang-Zhen Sun
First, apart from advancing the state of knowledge, the progressive division of labor that can occur within a given population encourages the adoption of more specialized, differentiated intermediate goods in the production process. Second, the level of division of labor and the extent of the market depend on each other. Using a general equilibrium model with increasing returns to specialization, economies of complementarity between intermediate goods, and transaction costs, we demonstrate that the level of division of labor and the number of intermediate goods increase concurrently as transaction conditions are improved. [source]

GEOGRAPHICAL SPACE AND EFFECTIVE DEMAND UNDER STAGNATION

AUSTRALIAN ECONOMIC PAPERS, Issue 4 2006
WATARU JOHDO
This paper investigates the adjustment mechanism between geographical space and effective demand under stagnation by constructing a spatial model with stagnation included. The model takes the idea of stagnation in Ono (2001) and combines it with the spatial model of Perera-Tallo (2003). The spatial model features local monopolists that import intermediate goods from other monopolists at a cost that can be decreased through investment. Using the integrated model, we reach the following conclusion: the wider the geographical space, the lower the effective demand under stagnation. This mechanism is explained as follows. Under stagnation, where demand has reached an upper bound, a decrease in the marginal cost of reaching distant intermediate suppliers reduces employment. The reason is ,love of variety' in production: for given final output, more variety of available intermediate inputs crowds out per-variety demand of intermediates and thus employment. Decreases in employment then lead to a decrease in the rate of time preference through a rise in the deflation rate, and thereby decrease the desire for consumption, consequently cutting effective demand. [source]

COMPARATIVE ANALYSIS OF EXCHANGE RATE APPRECIATION AND AGGREGATE ECONOMIC ACTIVITY: THEORY AND EVIDENCE FROM MIDDLE EASTERN COUNTRIES

BULLETIN OF ECONOMIC RESEARCH, Issue 1 2008
Magda Kandil
F31; F40; F41; F43 ABSTRACT The paper examines the effects of exchange rate depreciation on real output and price in a sample of 11 developing countries in the Middle East. The theoretical model decomposes movements in the exchange rate into anticipated and unanticipated components. Unanticipated currency fluctuations determine aggregate demand through exports, imports, and the demand for domestic currency, and determine aggregate supply through the cost of imported intermediate goods. The evidence indicates that the supply channel attributed to anticipated exchange rate appreciation results in limited effects on output growth and price inflation. Consistent with theory's predictions, unanticipated appreciation of the exchange rate appears more significant with varying effects on output growth and price inflation across developing countries. [source]

China's Sustained Economic Growth: Do Direct R&D Spillovers Matter?

CHINA AND WORLD ECONOMY, Issue 5 2010
Renai Jiang
F21; F23; O30; O47 Abstract Using data from 1986,2005, the present paper estimates the impact of direct knowledge spilled over from G-7 countries on China's economy. We use telephone line penetration rates and personnel flows to estimate the direct spillover effect. Our results show that direct knowledge spillovers through telecommunication networks and personnel flows are important components of international R&D spillovers in China. These direct channels of spillover effectively accelerate China's economic growth. Therefore, China should invest more in human capital and in its telecommunication network to enhance the absorptive capacity of direct R&D spillovers, and to increase communication with other nations, in particular the USA and Japan. More subsidies to domestic R&D research and purchase of intermediate goods will help to raise China's R&D intensity. [source]