Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192135 
Year of Publication: 
1995
Series/Report no.: 
Discussion Papers No. 151
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
The paper analyses the price on domestic market for an aggregate commodity produced by Norwegian private mainland economy. The long-run solution is modelled assuming imperfect competition. The elasticities with respect to unit labour costs and competing prices vary with an indicator for competitive strength in domestic market. I consider two models for the dynamic part of the equation. Model A is a conditional ECM in current and lagged variables. Model B is derived from a multiperiod quadratic loss function which introduces rational expectations to the model. The backward-forward restrictions are not rejected. The estimated elasticities for both models are in line with the previous empirical results for the Norwegian economy. Model A is preferred to Model B, partly on the basis of informal encompassing results.
Subjects: 
Domestic prices
Imperfect competition
Time-varying elasticities
Multiperiod loss function
Rational expectations
Error correction models
JEL: 
C22
D43
D84
Document Type: 
Working Paper
Document Version: 
Digitized Version

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