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Wage and Price Adjustment in a Multimarket Disequilibrium Model

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  • Salanie, Bernard

Abstract

The estimation of wage and price adjustment equations rests heavily on the use of tension variables that aim at capturing the disequilibria in the labor and goods markets. Disequilibrium models therefore provide a natural way of endogenizing these tension variables. This paper estimates jointly a two-market disequilibrium model and a wage and price adjustment block where price and wage growth react to excess effective demands. The estimation is carried out using the simulated pseudo-maximum-likelihood methods developed by Laroque and Salanie (1989); the results promising as regards the estimation of even more sophisticated models. Copyright 1991 by John Wiley & Sons, Ltd.

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  • Salanie, Bernard, 1991. "Wage and Price Adjustment in a Multimarket Disequilibrium Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 6(1), pages 1-15, Jan.-Marc.
    • Handle: RePEc:jae:japmet:v:6:y:1991:i:1:p:1-15
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    Cited by:

    1. Jacquinot, Pascal & Mihoubi, F., 1996. "Dynamique et hétérogénéité de l’emploi en déséquilibre," L'Actualité Economique, Société Canadienne de Science Economique, vol. 72(2), pages 113-148, juin.
    2. Revoredo-Giha, Cesar & Fletcher, Stanley M., 2003. "Does The Existence Of Market Power Affect Marketing Loan Programs?," 2003 Annual meeting, July 27-30, Montreal, Canada 22241, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Monfort, Alain, 1992. "Quelques développements récents des méthodes macroéconométriques," L'Actualité Economique, Société Canadienne de Science Economique, vol. 68(1), pages 305-324, mars et j.
    4. Lee, Lung-Fei, 1997. "A smooth likelihood simulator for dynamic disequilibrium models," Journal of Econometrics, Elsevier, vol. 78(2), pages 257-294, June.

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