On the use of Laspeyres and Paasche indices in a neoclassical import model
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1983-04-10Metadata
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- Rapporter / Reports (SSB) [1689]
Abstract
In the , 'Norwegian planning models developed by the Central Bureau
of Statistics the bulk of imports is determined by means of an import share
matrix of constant coefficients with exogenous adjustments. Recent work
has attempted to endogenize these coefficient changes by making them
functions of the relative price of imports.
The introduction of such an explicit functional form, describing
the substitution possibilities between the imported and the domestic input,
raises the question of whether one should continue to insist on the fact
that the volume share of imported and domestic input should
add to one, and what the consequences of such a normalization would be.
The paper attempts to answer these questions first at the level of the
input to a single sector, and then in the context of a multi-sectoral model
as a whole.