The Relative Price of Non-traded Goods under Imperfect Competition

• Autores: Javier Coto Martinez, Juan Carlos Reboredo Nogueira
• Localización: Oxford bulletin of economics and statistics, ISSN 0305-9049, Vol. 76, Nº. 1, 2014, págs. 24-40
• Idioma: inglés
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• Resumen

  • We consider the role of imperfect competition in explaining the relative price of non-traded to traded goods within the Balassa–Samuelson framework. Under imperfect competition in these two sectors, relative prices depend on both productivity and mark-up differentials. We test this hypothesis using a panel of sectors for 12 OECD countries. The empirical evidence suggests that relative price movements are well explained by productivity and mark-up differentials.