Nguyen, Thang (2005): Separating Quantity Shock and Quality Innovation in Relative Prices.
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The study develops a simple general equilibrium model to infer relative quality changes, and applies the method to the US services goods economy in 1946-2005. The general equilibrium framework helps separate quantity and quality e¤ects on the observable relative price and budget share which constitute double manifestation. Empirical results show that US services relative quality is increasing since 1970s, and quantity shock alone cannot fully explain the evolution of services relative price. The latter finding puts forth a warning on the missing of quality changes in some business cycle models.
|Item Type:||MPRA Paper|
|Original Title:||Separating Quantity Shock and Quality Innovation in Relative Prices|
|Keywords:||quality innovation; quality inference; business cycles|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level; Inflation; Deflation
E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles
|Depositing User:||Thang Nguyen|
|Date Deposited:||08. Oct 2006|
|Last Modified:||12. Feb 2013 13:59|
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