EMPIRICALLY WEIGHTED INDEXES FOR IMPORT DEMAND FUNCTIONS.

This article presents an empirical approach to the aggregation problem. An aggregate dependent variable is properly thought to depend on a long string of disaggregated explanatory variables. There are two extreme ways of analyzing an equation such as this. All of the explanatory variables individual...

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Publicado en:Review of Economics & Statistics Vol. 55; no. 4; pp. 441 - 451
Autor principal: Learner, Edward E.
Formato: Artículo
Publicado: MIT Press Nov73
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: Nov73
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        au: Learner, Edward E.
      su:
        Indexation (Economics)
        Demand function
        Imports
        Bayesian analysis
        Economic indicators
        Distributed lags (Economics)
        Index numbers (Economics)
        Price indexes
        Economic demand
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        subj:
          Indexation (Economics)
          Demand function
          Imports
          Bayesian analysis
          Economic indicators
          Distributed lags (Economics)
          Index numbers (Economics)
          Price indexes
          Economic demand
      ab: This article presents an empirical approach to the aggregation problem. An aggregate dependent variable is properly thought to depend on a long string of disaggregated explanatory variables. There are two extreme ways of analyzing an equation such as this. All of the explanatory variables individually can be used, or a summary of these in an index can be prepared and used only the index as an explanatory variable. Both of these approaches have serious shortcomings and the purpose of this paper is to consider methods that lie between these extremes. The article analyzes import demand functions. One phenomenon specific to import functions is that the domestic indexes that are typically used have weights that are quite unlikely to be adequate for analyzing competition between imports and domestic goods. A Bayesian evaluation of the sample evidence regarding the competing index schemes is also summarized. Data indicates a strong preference for the double-decay lag pattern. The article concludes that weighting scheme used to construct indexes of prices and incomes is unimportant for estimating aggregate impacts since variation in the weights within a meaningful range will not imply significantly different estimates of the aggregate impacts.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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