Skip to main content
SpringerLink
Log in

Price formation and the inflationary process in a small open economy (The Netherlands)

  • Published:
De Economist Aims and scope Submit manuscript

Summary

Price formation in the manufacturing, services, building and agricultural sectors is analysed by estimating price equations in which unit labour costs, import prices, capacity utilization and the structure of the sellers market (sheltered or competitive) play a part. These equations have been included in a model in which sectoral wages and social security premiums are endogenous as well. This model, which is still partial since it considerse.g. labour productivity and capacity utilization as exogenous, allows a study of the intersectoral multiplier effects which were found to be quite considerable.

A large number of simulation results are presented showing the effects of both domestic and foreign exogenous shocks.

Finally, an analysis of the relative importance of the factors determining the rise in consumer prices during 1954–1972 has been carried out.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Aukrust, O.,PRIMI; A Model of the Price and Income Distribution Mechanism of an Open Economy, Oslo, 1970.

  • Bakhoven, A. F. andY. M. Ypma, ‘Kwantitative analyse van de sociale zekerheid,’ in V. Halberstadt (ed.),De Economie van de sociale zekerheid, Deventer, 1974.

  • C.P.B.,De Nederlandse Economie in 1973, Den Haag, 1970.

  • Driehuis, W., ‘Inflation, Wage Bargaining, Wage Policy and Production Structure: Theory and Empirical Results for the Netherlands,’De Economist, CXXIII (1975), this issue.

  • Driehuis, W. andJ. T. N. van der Lem,Production function, Capacity Utilization and Capital-Labour Substitution in the Netherlands' Manufacturing Industry, Paper presented to OECD, Central Planning Bureau, The Hague, 1973.

    Google Scholar 

  • Driehuis, W. andP. de Wolff, ‘A Sectoral Wage-Price Model for the Netherlands' Economy,’ in H. Frisch (ed.),Inflation in Small Countries, Vienna (forthcoming in 1975).

  • Eckstein, O. andG. Fromm, ‘The Price Equation,’American Economic Review, LVIII (1968), pp. 1159–1183.

    Google Scholar 

  • Edgren, G., K. Faxèn andC. Odhner,Wage Formation and the Economy, London, 1973.

  • Hartog, H. den,The Economic Impact of Pollution Abatement, Central Planning Bureau, The Hague (Occasional Papers no. 1), 1973.

    Google Scholar 

  • Nordhaus, W. D., ‘Recent Developments in Price Dynamics,’ in O. Eckstein (ed.),The Econometrics of Price Determination, Washington, 1970.

  • Schultze, C. L. andJ. L. Tyron, ‘Prices and Wages,’ in J. S. Duesenberryet. al., The Brookings Quarterly Econometric Model o f the United States, Amsterdam, 1965.

  • Verdoorn, P. J., J. J. Post andS. S. Goslinga,The 1969 Reestimation of the Annual Model, Central Planning Bureau, The Hague, 1970.

    Google Scholar 

  • Wolff, P. de,Note on Incomes Policies, Paper prepared for IEA Conference on ‘Inflation Theory and Anti-inflation Policy,’ Saltsjbbaden, August 1975.

Download references

Author information

Authors and Affiliations

  1. University of Amsterdam, Amsterdam, The Netherlands

    P. de Wolff (Professor of macro-economics, lecturer in mathematical economics and professor of mathematical economics and econometrics)

Authors
  1. W. Driehuis
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. A. van Heeringen
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. P. de Wolff
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Driehuis, W., van Heeringen, A. & de Wolff, P. Price formation and the inflationary process in a small open economy (The Netherlands). De Economist 123, 680–722 (1975). https://doi.org/10.1007/BF02078324

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF02078324

Keywords

Search

Navigation