[PDF] An Economic Analysis Of The Dynamics Of Price Determination eBook

Author : Alan Blinder
Publisher : Russell Sage Foundation
Page : 412 pages
File Size : 17,93 MB
Release : 1998-01-08
Category : Business & Economics
ISBN : 1610440684

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Why do consumer prices and wages adjust so slowly to changes in market conditions? The rigidity or stickiness of price setting in business is central to Keynesian economic theory and a key to understanding how monetary policy works, yet economists have made little headway in determining why it occurs. Asking About Prices offers a groundbreaking empirical approach to a puzzle for which theories abound but facts are scarce. Leading economist Alan Blinder, along with co-authors Elie Canetti, David Lebow, and Jeremy B. Rudd, interviewed a national, multi-industry sample of 200 CEOs, company heads, and other corporate price setters to test the validity of twelve prominent theories of price stickiness. Using everyday language and pertinent scenarios, the carefully designed survey asked decisionmakers how prominently these theoretical concerns entered into their own attitudes and thought processes. Do businesses tend to view the costs of changing prices as prohibitive? Do they worry that lower prices will be equated with poorer quality goods? Are firms more likely to try alternate strategies to changing prices, such as warehousing excess inventory or improving their quality of service? To what extent are prices held in place by contractual agreements, or by invisible handshakes? Asking About Prices offers a gold mine of previously unavailable information. It affirms the widespread presence of price stickiness in American industry, and offers the only available guide to such business details as what fraction of goods are sold by fixed price contract, how often transactions involve repeat customers, and how and when firms review their prices. Some results are surprising: contrary to popular wisdom, prices do not increase more easily than they decrease, and firms do not appear to practice anticipatory pricing, even when they can foresee cost increases. Asking About Prices also offers a chapter-by-chapter review of the survey findings for each of the twelve theories of price stickiness. The authors determine which theories are most popular with actual price setters, how practices vary within different business sectors, across firms of different sizes, and so on. They also direct economists' attention toward a rationale for price stickiness that does not stem from conventional theory, namely a strong reluctance by firms to antagonize or inconvenience their customers. By illuminating how company executives actually think about price setting, Asking About Prices provides an elegant model of a valuable new approach to conducting economic research.

Author : Craig Pirrong
Publisher : Cambridge University Press
Page : 238 pages
File Size : 50,65 MB
Release : 2011-10-31
Category : Business & Economics
ISBN : 1139501976

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Commodities have become an important component of many investors' portfolios and the focus of much political controversy over the past decade. This book utilizes structural models to provide a better understanding of how commodities' prices behave and what drives them. It exploits differences across commodities and examines a variety of predictions of the models to identify where they work and where they fail. The findings of the analysis are useful to scholars, traders and policy makers who want to better understand often puzzling - and extreme - movements in the prices of commodities from aluminium to oil to soybeans to zinc.

Author : Jonathan F. Cogliano
Publisher : Edward Elgar Publishing
Page : 431 pages
File Size : 34,17 MB
Release : 2018-07-27
Category : Business & Economics
ISBN : 1786430649

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This book provides a comprehensive and rigorous, yet accessible, analysis of classical and Marxian price and value theory using the tools of contemporary economic analysis. The broad conceptual framework and methodology of Marx and the classical authors offers interesting and relevant perspectives on the basic structure and evolution of modern capitalist economies. Arguably, the book provides a deeper and more nuanced understanding of today's economic problems than can be gained via mainstream approaches.

Author : Jerry Green
Publisher :
Page : 45 pages
File Size : 21,59 MB
Release : 1980
Category : Equilibrium (Economics)
ISBN :

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The basic assumption of this paper is an attempt to be specific about price formation while retaining a fixed-price, quantity-constrained equilibration in the short-run. The second theme of this paper is the role of inventories in macrodynamics a topic of long-recognized importance, but one which has not received much attention within the disequilibrium literature. We will analyze how the level of inventories interacts with the level of prices and wages, and how the spillover effects in a fixed-price equilibrium produce certain testable characteristics in macro time series data. We will argue that these can be used to discriminate between a model of the type we study and the analogous flexible-price system. In section 2 we set out the basic model and discuss its assumptions. Section 3 derives the short-run quantity-constrained equilibrium as it depends on initial inventory stocks and on the random disturbances within the period. Section 4 presents, for comparison purposes, the analogous results under conditions of full price flexibility after these shocks are realized. Sections 5 and 6 are the heart of the paper. We first derive the probabilistic nature of the equilibrium as it depends upon the underlying stochastic disturbances. The probabilities of different types of quantity constrained equilibria can be compared. Then, we use these results to present the dynamics of inventory behavior and the statistical relationships between real wages, inventories and employment. We emphasize the possibility of using this type of analysis to test the disequilibrium hypothesis with anticipatory pricing, against the market-clearing assumptions

Author : M. MARIA JOHN KENNEDY
Publisher : PHI Learning Pvt. Ltd.
Page : 408 pages
File Size : 45,26 MB
Release : 2011-02-12
Category : Business & Economics
ISBN : 8120342402

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Macroeconomic theories were designed to cope up with the economic turmoil, such as Great Depression, so as to stabilize the economy. This book comprehensively explains the broad aggregates and their interactions such as national income and output, the unemployment rate, and price inflation, and sub-aggregates like total consumption and investment spending, and their components. Divided into six parts, the textbook elaborates various aspects of macro-economics—circular flow and its effects on national income, monetary theory, business cycle theory and macroeconomic policies—in detail. The book makes clear the difference between three approaches to economics—Keynesian economics, which focuses on demand; New-classical economics, which is based on rational expectations and efficient markets; and Innova-tion economics, which is focused on long run growth through innovation. A prominent feature of this text is the use of simple algebraic expressions and formulations to reinforce analytical expositions of complex macroeconomic theories in students. The book also explicates how macroeconomic models and their forecasts can be utilized by both governments and large corporations to assist in the development and evaluation of economic policy. The chapters are incorporated with real-life examples giving practical insight on the subject. Primarily intended for the undergraduate and postgraduate students of economics, this book can also be beneficial for the students opting for the courses in commerce.