Universität zu Köln

Groneck, Max and Kaufmann, Christoph (2017). Determinants of Relative Sectoral Prices: The Role of Demographic Change. Oxf. Bull. Econ. Stat., 79 (3). S. 319 - 348. HOBOKEN: WILEY. ISSN 1468-0084

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Abstract

Demographic change raises demand for non-tradable old-age related services relative to tradable commodities. This demand shift increases the relative price of non-tradables and thereby causes real exchange rates to appreciate. We claim that the change in demand affects prices via imperfect intersectoral factor mobility. Using a sample of 15 OECD countries, we estimate a robust increase of relative prices. According to our main estimate, up to one fifth of the average increase in relative prices between 1970 and 2009 can be attributed to population ageing. Further findings confirm the relevance of imperfect factor mobility: Countries with more rigid labour markets experience stronger price effects.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Groneck, Max UNSPECIFIED UNSPECIFIED UNSPECIFIED Kaufmann, Christoph UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-230510
DOI:	10.1111/obes.12149
Journal or Publication Title:	Oxf. Bull. Econ. Stat.
Volume:	79
Number:	3
Page Range:	S. 319 - 348
Date:	2017
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1468-0084
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language REAL EXCHANGE-RATE; PURCHASING-POWER PARITY; PANEL-DATA; HETEROGENEOUS PANELS; NONTRADED GOODS; LONG-RUN; LABOR; RATES; PRODUCTIVITY; REAPPRAISAL Multiple languages Economics; Social Sciences, Mathematical Methods; Statistics & Probability Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/23051