The Pricing Policy of the Private and Public Enterprise (A Flexible Markup Model Applied to the Canadian Economy)

J.G. Loranger

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: Who Is the Greatest Culprit for Inflation in Canada: the Private Or the State Enterprises? and Inside Each of Them, Is It Labor Or Capital (Real and Financial) Which Is Pushing Upward the Price Level Most Strongly? the Aim of This Paper Is to Test Such Hypotheses From a Sample over the Last Ten Years of Private and Public Firms Chosen Among the Utility S Sector Where the Largest Private and Public Canadian Corporations Are Concentrated. the Theoretical Justification of Such a Model Is Derived From a Generalization of the Markup Model Where All Production Factors, Including Finance As a Distinct Factor From Capital, Are Taken Into Consideration. It Is Also Demonstrated the Link Between the Markup Approach and the Qualitative Theory of Money and Finance. From the First Econometric Results, the Existence of a Different Behavior Between Private and State Enterprises Is Confirmed by the Estimation of the Total Cost Or Revenu Function, Although the Positive Differential Cost of Labor in the State Enterprises Would Be Almost Exactly Compensated by the Negative Differential Cost of Capital (Real and Financial). the Large and Significant Differences Between Sectors Is Also a Clear Indication That the Use of the Generalized Least Squares Estimator Would Be the Best Appropriate Method for Handling Such Econometric Tests.

Keywords: Pricing; Private Enterises; Public Enterises; Inflation (search for similar items in EconPapers)
Pages: 41P. pages
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:8550

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