The Relative Price of Nontraded Goods, Absorption, and Exchange Rate Policy in Chile, 1974-82

Guillermo Le Fort Varela

IMF Staff Papers, 1988, vol. 35, issue 2, 336-370

Abstract: The empirical effects of exchange rate policy and changes in absorption on the relative price of nontraded goods in Chile are examined. Three alternative theories of relative-price determination in a developing economy are tested: purchasing power parity, sector-specific factors, and sticky wages. The estimation results, obtained using both classical and Bayesian methods, favor the sticky-wages theory. Thus, as long as public sector wages are not fully indexed, a devaluation will have a lasting effect on the relative price of nontraded goods.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.jstor.org/stable/3867084?origin=pubexport main text (application/pdf)
Access to full text is restricted to subscribers.

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:pal:imfstp:v:35:y:1988:i:2:p:336-370

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

Access Statistics for this article

More articles in IMF Staff Papers from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().