A macroeconomic theory of price determination

Kazuyuki Sasakura

doi:10.1016/j.strueco.2021.08.008

A macroeconomic theory of price determination

Kazuyuki Sasakura

School of Political Science and Economics

Research output: Contribution to journal › Article › peer-review

Abstract

Motivated by disputes over the quantity theory of money and the fiscal theory of the price level (the FTPL), I consider price determination in another macro model which can be used both in the short run and in the long run. It is a two-sector model with flexible prices and profit-maximizing firms. Government and the foreign sector are also included. It is assumed that prices are determined by supply and demand in the short run unlike in the quantity theory and the FTPL. In particular the determination of the price of consumption goods is pursued. Finally the FTPL is examined.

Original language	English
Pages (from-to)	214-227
Number of pages	14
Journal	Structural Change and Economic Dynamics
Volume	59
DOIs	https://doi.org/10.1016/j.strueco.2021.08.008
Publication status	Published - 2021 Dec

Keywords

Fiscal theory of the price level
Neoclassical synthesis
Price determination
Quantity theory of money

ASJC Scopus subject areas

Economics and Econometrics

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10.1016/j.strueco.2021.08.008

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title = "A macroeconomic theory of price determination",

abstract = "Motivated by disputes over the quantity theory of money and the fiscal theory of the price level (the FTPL), I consider price determination in another macro model which can be used both in the short run and in the long run. It is a two-sector model with flexible prices and profit-maximizing firms. Government and the foreign sector are also included. It is assumed that prices are determined by supply and demand in the short run unlike in the quantity theory and the FTPL. In particular the determination of the price of consumption goods is pursued. Finally the FTPL is examined.",

keywords = "Fiscal theory of the price level, Neoclassical synthesis, Price determination, Quantity theory of money",

author = "Kazuyuki Sasakura",

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year = "2021",

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doi = "10.1016/j.strueco.2021.08.008",

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AB - Motivated by disputes over the quantity theory of money and the fiscal theory of the price level (the FTPL), I consider price determination in another macro model which can be used both in the short run and in the long run. It is a two-sector model with flexible prices and profit-maximizing firms. Government and the foreign sector are also included. It is assumed that prices are determined by supply and demand in the short run unlike in the quantity theory and the FTPL. In particular the determination of the price of consumption goods is pursued. Finally the FTPL is examined.

KW - Fiscal theory of the price level

KW - Neoclassical synthesis

KW - Price determination

KW - Quantity theory of money

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JO - Structural Change and Economic Dynamics

JF - Structural Change and Economic Dynamics

ER -

A macroeconomic theory of price determination

Abstract

Keywords

ASJC Scopus subject areas

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