Adjustment to Variations in Imported Input Prices: The Role of Economic Structure

41 Pages Posted: 21 Mar 2001

See all articles by Louka T. Katseli

Louka T. Katseli

Organization for Economic Co-Operation and Development (OECD) - Development Centre (DEV); National Kapodistrian University of Athens - Faculty of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Nancy Peregrim Marion

Dartmouth College - Department of Economics

Date Written: July 1980

Abstract

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.

Suggested Citation

Katseli, Louka T. and Marion, Nancy P., Adjustment to Variations in Imported Input Prices: The Role of Economic Structure (July 1980). NBER Working Paper No. w0501, Available at SSRN: https://ssrn.com/abstract=263383

Louka T. Katseli (Contact Author)

Organization for Economic Co-Operation and Development (OECD) - Development Centre (DEV) ( email )

94, rue Chardon Lagache
Paris, 75775
France

National Kapodistrian University of Athens - Faculty of Economics ( email )

8 Pesmazoglou street
GR-10559 Athens
Greece

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Nancy P. Marion

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States
(603) 646-2511 (Phone)

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