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The transmission of import prices to domestic prices: an application to Indonesia

Warr, P.

Applied Economics Letters 15(7): 499-503

2008


ISSN/ISBN: 1350-4851
DOI: 10.1080/13504850500425410
Accession: 023968351

The manner in which the landed price of imports affects domestic prices is central to trade policy analysis. This study clarifies the relationship between two methods of modelling this relationship. These are the pass-through elasticity and the 'Armington' elasticity of substitution in demand between imported and domestically produced goods. The latter treatment is commonly used within applied general equilibrium models.

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