Price-Wage System with Taxation: Multivariate Cointegration Analysis

Aleksander Welfe and Piotr Keblowski
Additional contact information
Piotr Keblowski: Chair of Econometric Models and Forecasts, University of Lodz

No 13, Working Papers from Department of Applied Econometrics, Warsaw School of Economics

Abstract: The paper investigates the price system and the wage equation in the presence of taxes. Price formation is analysed at three levels: producer’s prices, trade in consumer goods and, separately, in services, and at the aggregate level of the cost of living index. This is in the spirit of classical macromodels that usually apply the “bottom-to-top” approach. However, because of nonstationarity of variables, this study employs multivariate cointegration. The empirical investigation is based on Polish monthly data covering the period from January 1993 to December 2003. Its results allow to conclude that as many as five stable long-run relationships drove inflation in Poland in that period. Appropriate decomposition of price formation made it possible to incorporate all conditions postulated by economic theory (i.e. homogeneity, unit elasticities) and to show how direct and indirect taxes impact decisions made by the employers and employees.

JEL-codes: C32 E24 E31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2006-05-22
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://kolegia.sgh.waw.pl/pl/KAE/struktura/IE/stru ... Papers/aewp06-06.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://kolegia.sgh.waw.pl/pl/KAE/struktura/IE/struktura/ZES/Documents/Working_Papers/aewp06-06.pdf [301 Moved Permanently]--> https://kolegia.sgh.waw.pl/pl/KAE/struktura/IE/struktura/ZES/Documents/Working_Papers/aewp06-06.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wse:wpaper:13

Access Statistics for this paper

More papers in Working Papers from Department of Applied Econometrics, Warsaw School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Marcin Owczarczuk ( this e-mail address is bad, please contact ).