Economic theory and econometric dynamics in modelling wages and prices in the United Kingdom

We show that a "competing claims" model of imperfect competition can explain the movements of wages and prices in the United Kingdom, using quarterly data covering 1976-93. We argue that careful attention both to economic theory and to the interaction between dynamics and identification is crucial in the building of the model and to dynamic econometric models in general. We use a small numerical example with simulated cointegrated data to illustrate the potential pitfalls.

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Year of publication:	1999-08-16
Authors:	Fisher, Paul G. ; BÅrdsen, Gunnar
Published in:	Empirical Economics. - Department of Economics and Finance Research and Teaching. - Vol. 24.1999, 3, p. 483-507
Publisher:	Department of Economics and Finance Research and Teaching
Subject:	Dynamic econometric models \| steady state \| cointegration \| equilibrium correction \| wages \| prices

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Extent:	application/pdf
Type of publication:	Article
Notes:	received: January 1998/final version received: November 1998
Classification:	C32 - Time-Series Models ; C51 - Model Construction and Estimation ; E31 - Price Level; Inflation; Deflation ; J30 - Wages, Compensation, and Labor Costs. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005382262