Title

Sticky prices and time to equilibrium: Evidence from Asia-Pacific trade-related economies

Date of this Version

6-24-2011

Document Type

Journal Article

Publication Details

Interim status: Citation only.

Ho, C. S. F., & Ariff, M. (2010). Sticky prices and time to equilibrium: Evidence from Asia-Pacific trade-related economies. Applied economics, 43(21), 2850-2861.

Access the publisher's website.

2011 HERDC submission. FoR code: 140210

© Copyright Taylor & Francis, 2011

ISSN

0003-6846

Abstract

The theoretical relation between exchange rate and prices has been a difficult proposition to find supporting evidence despite many studies of developed economies using standard research methods. The exchange rate to price relation appears to hold in the long run only, a result consistent with sticky price hypothesis. There is a need to add to this sticky price literature by examining more yet-studied economies to this area of research. This article presents results to support long-run equilibrium in the Asia-Pacific economies as being 5 years. The methodology is used to group countries with high-trade intensity within a region and value-weight the resulting variables to test the theory in a regional context. Our positive finding on the long-run equilibrium, we believe, helps in some ways to enrich the literature on the exchange rate behaviour of an important region for world trade.

This document is currently not available here.

Share

COinS
 

This document has been peer reviewed.