Chapter 5 of Paul Downward’s Pricing Theory in Post-Keynesian Economics: A Realist Approach (Cheltenham, UK, 1999) deals with a new “synthetic” econometric study on pricing.
Downward takes UK manufacturing prices and prices of industrial factor inputs in the period from 1984 to 1991 in his own econometric study (Downward 1999: 106, with results Table 5.1, Downward 1999: 107).
He finds that costs are the more important factor in influencing the UK manufacturing prices he examined, even if some lesser influence from demand was seen, probably given the bad recession of the early 1990s (Downward 1999: 108).
Downward finds that prices display “considerable inertia” (Downward 1999: 110), and that the last period’s prices are generally carried over into the current period by businesses (Downward 1999: 108).
Downward, Paul. 1999. Pricing Theory in Post-Keynesian Economics: A Realist Approach. Edward Elgar Publishing, Cheltenham, UK and Northampton, MA.
Tuesday, January 21, 2014
Downward’s Pricing Theory in Post-Keynesian Economics: Chapter 5
Posted by Lord Keynes at 7:50 AM
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