Relative price variability and inflation in an equilibrium price misperceptions' model
Relative price variability and inflation in an equilibrium price misperceptions' model
In this paper we investigate the relationship between relative price variability and inflation in the United Kingdom using the equilibrium price misperceptions' model of Lucas (American Economic Review, 1973, 63, 526–534). We obtain a data consistent version of the equilibrium price misperceptions' model linking relative price variability, inflation and a small set of key macroeconomic variables. We find a significant, positive role for inflation in explaining relative price variability and suggest that this may be due to a positive relation between the variance of sector-specific shocks and inflation.
51-57
Clare, A.D.
e9a9923a-dee5-4521-a5e1-d404befa7069
Thomas, S.H.
51ff3b62-89ae-4190-8a9e-ed4a76c8297c
1993
Clare, A.D.
e9a9923a-dee5-4521-a5e1-d404befa7069
Thomas, S.H.
51ff3b62-89ae-4190-8a9e-ed4a76c8297c
Clare, A.D. and Thomas, S.H.
(1993)
Relative price variability and inflation in an equilibrium price misperceptions' model.
Economics Letters, 42 (1), .
(doi:10.1016/0165-1765(93)90172-9).
Abstract
In this paper we investigate the relationship between relative price variability and inflation in the United Kingdom using the equilibrium price misperceptions' model of Lucas (American Economic Review, 1973, 63, 526–534). We obtain a data consistent version of the equilibrium price misperceptions' model linking relative price variability, inflation and a small set of key macroeconomic variables. We find a significant, positive role for inflation in explaining relative price variability and suggest that this may be due to a positive relation between the variance of sector-specific shocks and inflation.
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Published date: 1993
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Local EPrints ID: 37386
URI: http://eprints.soton.ac.uk/id/eprint/37386
ISSN: 0165-1765
PURE UUID: 444872b0-62c0-418d-99fb-7d6632feb6ad
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Date deposited: 28 Feb 2007
Last modified: 15 Mar 2024 07:58
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Author:
A.D. Clare
Author:
S.H. Thomas
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