Domestic Prices (domestic + price)

Distribution by Scientific Domains


Selected Abstracts


Trade Policies for Exporting Industries under Free Entry

GERMAN ECONOMIC REVIEW, Issue 4 2001
Roberto A. De Santis
This paper computes optimal export taxes and domestic production subsidies for exporting industries under free entry. We show that domestic welfare is not at maximum, as is typically believed, when the export price is a monopoly price, and the domestic price is a competitive price, because a market structure effect has to be taken into account. Furthermore, we show that the optimal tax/subsidy formulas for an oligopoly coincide with those under perfect competition, if foreign and domestic demand functions are both linear. We also discuss optimal trade policies when only one instrument is available, and we run numerical simulations to determine and compare optimal trade taxes under endogenous and exogenous market structures. [source]


Interdependencies between Monetary Policy and Foreign Exchange Interventions under Inflation Targeting: The Case of Brazil and the Czech Republic

INTERNATIONAL FINANCE, Issue 2 2010
Jean-Yves Gnabo
Inflation-targeting central banks often explicitly reserve the right to intervene in foreign exchange markets when the exchange rate ,deviates from fundamentals' and/or ,displays excessive volatility'. In the case of emerging markets, central banks can often ill afford to neglect exchange rate developments when setting monetary policy because of a high pass-through of nominal exchange rate changes to domestic prices. As a result, interventions and monetary policy are interrelated, a hypothesis that has been overlooked in the literature. To bridge this gap, this paper includes monetary policy indicators in the estimation of intervention reaction functions for Brazil and the Czech Republic since the adoption of inflation targeting. Our main finding is that interventions take place independently of the contemporaneous monetary policy setting in Brazil, but not in the Czech Republic, where both policies appear to be coordinated. [source]


Profit Margins in Mexico's Manufacturing Industry: an Econometric Study

METROECONOMICA, Issue 1 2000
Julio Lopez G.
Prices, wages and profit margins in Mexico have varied considerably. The purpose of this study is to analyze the evolution of profit margins in the Mexican manufacturing industry during the last two decades and to provide an explanation for the changes. The econometric study shows that surges in the exchange rate provoke increases in prices, both because imported input costs rise and because pressures from foreign competition are relaxed when domestic prices of imported goods rise. A second factor influencing margins is trade openness. Third, the level of profit margins also depends positively on the level of labor costs. An increase in labor costs tends to be passed along in a more than proportional manner to prices. Finally, an increase in interest rates seems to stimulate increases in profit margins, at least in some manufacturing divisions. [source]


Oil product consumption in OPEC Member Countries: a comparison of trends and structures

OPEC ENERGY REVIEW, Issue 2 2001
Atmane Dahmani
The purpose of the present work is to analyse oil product consumption trends within OPEC's 11 Member Countries and to compare the consumption structures within and between the countries. The study examines consumption structures by product (gasoline, kerosene, distillates, residuals and others) and the most relevant indicators of economic growth during the period 1980,98. The analysis shows that, during this period, most countries increased their consumption of gasoline, kerosene and distillates, which are light and medium products. However, the consumption of heavy products, such as residuals, was diversified within the considered countries. The structural change analysis, which relates to the similarities in the oil product consumption structures of Member Countries, was carried out by using sub-groups for the periods in which consumption structures are similar. This grouping seems to be the result of the influence of important factors on oil consumption, mainly oil product domestic prices, refinery capacity and configuration, the demographic factor and social unrest. Further steps in the study refer to some practical aspects regarding observed homogeneity in the grouping of oil consumption patterns. [source]


A Survey of Exchange Rate Pass-Through in Asia

ASIAN-PACIFIC ECONOMIC LITERATURE, Issue 2 2007
Amit Ghosh
Exchange rate pass-through (ERPT) refers to the transmission of exchange-rate changes into import (export) prices of goods in the destination-market currency as well as into aggregate domestic prices. This paper examines the analytical and empirical literature on ERPT with particular reference to Asia. It is generally believed that Asian economies are potentially susceptible to ERPT into domestic inflation since they are highly trade-dependent. Particular attention is paid to production sharing,a key characteristic of Asian trade,and its implications for ERPT. [source]


Exchange Rate Pass-through in China

CHINA AND WORLD ECONOMY, Issue 1 2009
Chang Shu
E31; F31; F32 Abstract During the second half of 2007 and early part of 2008 when there were intense inflationary pressures in China, RMB appreciation was advocated as a means of helping to curb inflation. The effectiveness of appreciation in controlling inflation depends on the impact of exchange rate movements on import and domestic prices. Our analysis finds fairly large and speedy exchange rate pass-through (ERPT) to import prices: 50 and 60 percent for the short run and long run, respectively. However, the degree of ERPT decreases along the price chain from upstream to downstream prices. ERPT for consumer prices, the most downstream prices, is much milder and has substantial lags. A 10-percent rise in the nominal effective exchange rate will dampen consumer prices by 1.1 percent within a year, with very little pass-through in the first half year, and by 2.0 percent over the long run. These findings, particularly the ERPT to consumer prices, suggest that RMB appreciation can help to reduce inflationary pressures over the longer term. However, it is unlikely to provide rapid relief to the current round of high inflation because of the long lags in ERPT. The RMB needs to strengthen in effective terms to exert the desired dampening impact on prices. [source]