Vassar College Digital Library
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Abstract
This paper argues that, in economies heavily dependent on imported inputs, the responsiveness of price and output to cost and demand factors are altered by foreign exchange bottlenecks if the government resorts to nonmarket allocation of import licenses. A model of price and output determination that captures this stipulation is presented. Estimation results for the Turkish manufacturing industry over the 1952-80 period support the hypothesis that price and output elasticities are different between the import crisis and noncrisis periods. Most importantly, monetary expansion is inflationary when there are important bottlenecks but has real output effects otherwise.
Details
Authors
Department or Program
Document Type
Issue Number
1
Page Numbers
111-131
Paper Number
8
Peer Reviewed
Reviewed
Publication Date
1989-11-01
Volume Number
42
English
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