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A method for macroeconomic consistency in current and constant prices

Author

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  • Khadr, Ali
  • Schmidt-Hebbel, Klaus

Abstract

This paper extends earlier work on current-price budget identities to treat constant-price flow relations. It introduces relative prices and constant-prices values for all relevant output and aggregate demand components and permits a distinction between real variables and relative price changes. It also permits breaking the changes in asset and liability holding down into: (a) changes in real holdings; and (b) capital gains and losses due to inflation and exchange rate depreciation. This makes possible a distinction between savings and a change in real wealth or"adjusted"savings.

Suggested Citation

  • Khadr, Ali & Schmidt-Hebbel, Klaus, 1989. "A method for macroeconomic consistency in current and constant prices," Policy Research Working Paper Series 306, The World Bank.
    • Handle: RePEc:wbk:wbrwps:306
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    References listed on IDEAS

    as
    1. May, Josef, 1970. "Period analysis and continuous analysis in Patinkin's macroeconomic model," Journal of Economic Theory, Elsevier, vol. 2(1), pages 1-9, March.
    2. Marshall, Jorge & Schmidt-Hebbel, Klaus, 1989. "Un marco analítico-contable para la evaluación de la política fiscal en América Latina," Series Históricas 9052, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    Cited by:

    1. Khadr, Ali & Schmidt-Hebbel, Klaus, 1989. "A framework for macroeconomic consistency for Zimbabwe," Policy Research Working Paper Series 310, The World Bank.
    2. Marshall, Jorge & Schmidt-Hebbel, Klaus, 1989. "Economic and policy determinants of public sector deficits," Policy Research Working Paper Series 321, The World Bank.
    3. Herman Bennett & Klauss Schmidt-Hebbel & Claudio Soto, 2000. "Nota técnica: Series de ahorro e ingreso por agente económico en Chile, 1960 - 1997," Estudios de Economia, University of Chile, Department of Economics, vol. 27(1 Year 20), pages 123-170, June.
    4. Vavouras, Ioannis S., 1999. "Public Sector Deficits: Their Economic and Policy Determinants in the Case of Greece," Journal of Policy Modeling, Elsevier, vol. 21(1), pages 89-100, January.

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