A demand system for input factors when there are technological changes in production

Hungnes, Håvard

doi:10.1007/s00181-010-0346-y

Cited by 7 publications

(4 citation statements)

References 12 publications

(5 reference statements)

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“…The user cost of capital defined in a standard way is important for determining demand for capital, cf. Hungnes (2011). Together with the demand for capital stock based on the production function in a standard way, the capital accumulation equations determine gross investments by industry.…”

Section: Discussionmentioning

confidence: 99%

Immigration and the Dutch disease A counterfactual analysis of the Norwegian resource boom 2004-2013

Cappelen

Eika

2019

Open Econ Rev

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The EU-enlargement in 2004 increased labour migration and affected the Norwegian labour market in particular. We study how this modified the Dutch disease effects during the resource boom 2004-2013. In the Norwegian case the resource movement effect of the petroleum industry has historically dominated the spending effect. One reason is the introduction of the fiscal policy rule in 2001 that limited spending. We find that economic growth in Norway was roughly doubled during this period due to the resource boom while total population increased by 2 percent. Moreover, both the resource movement and spending effects on Mainland GDP were roughly unaffected by immigration while employment increased, real wages fell and so did productivity.

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Section: Discussionmentioning

confidence: 99%

Immigration and the Dutch disease A counterfactual analysis of the Norwegian resource boom 2004-2013

Cappelen

Eika

2019

Open Econ Rev

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“…Cappelen (1992) provides an overview of the model. Recent documentation of some of the main blocks, such as factor demand, the consumption function and the distribution sector can be found in Hungnes (2011), Jansen (2013) and Boug et al (2013a), respectively. As these articles illustrate, the methodology underlying the macroeconomic model is to specify econometric models that encompasses several economic theories and include only those theories into the model that passes the empirical tests.…”

Section: The Macroeconomic Modelmentioning

confidence: 99%

“…We show below how the price index for other material inputs is determined. The whole demand system for input factors is outlined in Hungnes (2011).…”

Section: A General Overviewmentioning

confidence: 99%

“…All structural equations in the model have theoretical underpinnings and are estimated in blocks using a co-integrated VAR framework. Recent documentation of some of the main blocks, such as price setting, factor demand, the consumption function and the distribution sector can be found in Boug et al (2016), Hungnes (2011), Jansen (2013) and Boug et al (2013a), respectively.…”

Section: Introductionmentioning

confidence: 99%

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Deunionization and job polarization – a macroeconomic model analysis for a small open economy

Brasch

Gjelsvik²,

Sparrman

2018

Economic Systems Research

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Declining unionization rates and job polarization are two important labor market developments of recent decades. A large body of literature has analysed these phenomena separately, but little has been done to see whether there is a link between them. We employ a macroeconomic model for a small open economy with a large input-output core to analyse how deunionization may cause job polarization. Our analysis shows that medium-skilled workers are negatively affected by deunionization, mainly as a result of the heterogeneity of the elasticities of substitution between different types of labor. While the elasticities of substitution between highand medium-skilled labor are relatively low, the elasticities of substitution between medium-and low-skilled are relatively high. As a result, when deunionization leads to increased wage dispersion, we find that demand for low-skilled increases at the expense of medium-skilled labor, thus yielding a more polarised labor market. We would like to thank Pål Boug, Ådne Cappelen, Håvard Hungnes and Ingrid Bjartveit Krüger for inspiration and discussions, to Roger Hammersland for technical support in designing an automatic procedure for estimating the system of cost share equations and to Jørgen Ouren for carrying out the calculations. We also benefited from discussions during a presentation at

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Exchange Rate Pass-through in a Small Open Economy: the Importance of the Distribution Sector

2013

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Abstract:Several small open economies switched to inflation targeting during the 1990s, thereby giving up various forms of exchange rate targeting in favour of flexible exchange rates. Norway did the same early in 2001, and has thereafter experienced highly varying nominal exchange rates with consumer price inflation dropping far below the target during 2003 and 2004. Knowledge of the degree of exchange rate pass-through to import prices and further to consumer prices is essential for inflation targeting. The literature suggests that pass-through is greater to import prices than to consumer prices, which presumably is related to the role of distributors in the economy. We present empirical evidence on these issues for Norway by estimating import price equations and a dynamic model of the distributors pricing behaviour. Using a large-scale macroeconometric model of the Norwegian economy, we find exchange rate pass-through to import prices to be quite rapid in the short run, while pass-through to consumer prices seems to be modest. We show that, among the numerous channels through which the exchange rate operate, trade margins in the distribution sector act as cushions to exchange rate fluctuations, thereby being one of the main important source for the delay in pass-through. In spite of moderate pass-through to consumer prices, we find inflationary effects of exchange rate changes even in the short run, an insight important for inflation targeting central banks.

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A demand system for input factors when there are technological changes in production

Cited by 7 publications

References 12 publications

Immigration and the Dutch disease A counterfactual analysis of the Norwegian resource boom 2004-2013

Immigration and the Dutch disease A counterfactual analysis of the Norwegian resource boom 2004-2013

Deunionization and job polarization – a macroeconomic model analysis for a small open economy

Exchange Rate Pass-through in a Small Open Economy: the Importance of the Distribution Sector

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