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Functional Structure Inference
Type: Book
ISBN: 978-0-44453-061-5

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Article
Publication date: 1 January 1982

MICHAEL HOLLIHAN

The literature concerning the subject of inflation and relative prices has been growing so fast in the last few years that a review in chronological order allows for a…

Abstract

The literature concerning the subject of inflation and relative prices has been growing so fast in the last few years that a review in chronological order allows for a greater understanding of the subject. This approach is taken here.

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Studies in Economics and Finance, vol. 6 no. 1
Type: Research Article
ISSN: 1086-7376

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Article
Publication date: 1 November 2006

Magda Kandil

Using quarterly data for a sample of 17 industrial countries, the purpose of this paper is to study asymmetry in the face of monetary shocks compared to government spending shocks.

Abstract

Purpose

Using quarterly data for a sample of 17 industrial countries, the purpose of this paper is to study asymmetry in the face of monetary shocks compared to government spending shocks.

Design/methodology/approach

The paper outlines demand and supply channels determining the asymmetric effects of monetary and fiscal policies. The time‐series model is presented and an analysis of the difference in the asymmetric effects of monetary and fiscal shocks within countries is presented. There then follows an investigation of the relevance of demand and supply conditions to the asymmetric effects of monetary and fiscal shocks. The implications of asymmetry are contrasted across countries.

Findings

Fluctuations in real output growth, price inflation, wage inflation, and real wage growth vary with respect to anticipated and unanticipated shifts to the money supply, government spending, and the energy price. The asymmetric flexibility of prices appears a major factor in differentiating the expansionary and contractionary effects of fiscal and monetary shocks. Higher price inflation, relative to deflation, exacerbates output contraction, relative to expansion, in the face of monetary shocks. In contrast, larger price deflation, relative to inflation, moderates output contraction, relative to expansion in the face of government spending shocks. The growth of output and the real wage decreases, on average, in the face of monetary variability in many countries. Moreover, the growth of real output and the real wage increases, on average, in the face of government spending variability in many countries. Asymmetry differentiates the effects of monetary and government spending shocks within and across countries. The degree and direction of asymmetry provide a new dimension to differentiate between monetary and fiscal tools in the design of stabilization policies.

Originality/value

The paper's evidence sheds light on the validity of theoretical models explaining asymmetry in the effects of demand‐side stabilization policies. Moreover, the evidence should alert policy makers to the need to relax structural and institutional constraints to maximize the benefits of stabilization policies and minimize the adverse effects on economic variables.

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Journal of Economic Studies, vol. 33 no. 6
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 12 August 2019

Sweta Chaturvedi Thota and Ritwik Kinra

Research demonstrates that individuals display relative thinking – the tendency to consider relative savings rather than just absolute savings in their decisions to search…

Abstract

Purpose

Research demonstrates that individuals display relative thinking – the tendency to consider relative savings rather than just absolute savings in their decisions to search for a deal or purchase an item. This paper aims to review empirical and analytical literature on relative thinking, perceived search costs and price savings to propose and test a conceptual model of relative thinking.

Design/methodology/approach

Through two studies, the paper tests whether individuals display relative thinking when shopping across stores vs online and how they perceive search and time spent in pursuing savings. Both studies are adaptations of the classic jacket-and-calculator scenario study (Tversky and Kahneman, 1981).

Findings

Results show attenuation of the robust relative thinking phenomenon over the internet compared to shopping across stores. Individuals exhibit increased price sensitivity for both low and high relative savings conditions on the internet but demonstrate price sensitivity only in the high relative savings condition in the store shopping contexts. Diagnostic measures pertaining to the attractiveness of savings and the perceptions of search costs corroborate the support for relative thinking across stores but not over the internet.

Originality/value

These results lend weight to the central claim in this paper that the internet marks a new boundary condition for the relative thinking phenomenon in marketing literature. Theoretical and managerial implications of the findings, the limitations of the studies and future research opportunities are discussed.

Details

Journal of Consumer Marketing, vol. 36 no. 5
Type: Research Article
ISSN: 0736-3761

Keywords

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Book part
Publication date: 30 June 2004

Janet Ceglowski

This paper investigates the role of the border in Canadian and U.S. prices, based on a sample of highly disaggregated city-level retail prices. It finds substantial…

Abstract

This paper investigates the role of the border in Canadian and U.S. prices, based on a sample of highly disaggregated city-level retail prices. It finds substantial short-run differences in cross-border prices. While most of these are eliminated over time, long-run differences in the cross-border prices remain. These long-run cross-border differences average just over 20%, compared to mean long-run intranational price gaps of 7–9%. Short-run price differences are eliminated at similar rates in the cross-border and intranational data. Evidence from national average prices suggests the gap between cross-border prices has not narrowed during the recent depreciation of the Canadian dollar.

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North American Economic and Financial Integration
Type: Book
ISBN: 978-0-76231-094-4

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Article
Publication date: 1 April 1993

D.K. (Skip) Smith and William Weber

Winning market share in a major market from a deeply‐entrencheddominant competitor is a tough challenge. Uses Nielsen data onchannel‐specific market shares for Brand A and…

Abstract

Winning market share in a major market from a deeply‐entrenched dominant competitor is a tough challenge. Uses Nielsen data on channel‐specific market shares for Brand A and its leading competitor in a major US market to suggest one strategy a marketing manager might use to accomplish that objective. The dependent variable is relatively market share. The independent variables, based on the reference price and advertising share of voice literatures, relate current levels of price and promotional activity for Brand A and the dominant competitor to historical levels of price and promotional activity for the two competitors. A multiple regression analysis of the data indicates that the independent variables are significantly related to the relative market share dependent variable. Provides examples of the effect as well as heuristics flowing from the analysis.

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Journal of Product & Brand Management, vol. 2 no. 4
Type: Research Article
ISSN: 1061-0421

Keywords

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Article
Publication date: 21 June 2013

Eon van der Merwe Smit and Jhandré Bredenkamp

The purpose of this paper is to examine the effects of generic medicine competition on the market share growth and pricing of originator brand medicine in the South…

Abstract

Purpose

The purpose of this paper is to examine the effects of generic medicine competition on the market share growth and pricing of originator brand medicine in the South African private pharmaceutical market.

Design/methodology/approach

Regression analysis is applied to market share data of originator brand drugs that have been exposed to competition from generic substitutes, based on an agency model of the prescribing physician, the pharmacist or the medical scheme.

Findings

The results indicate that the price of an originator brand medicine relative to the weighted average price of its generics has a significant negative impact on the change of its market share. Investigations into the prices of the originator brands, in relation to the number of generic equivalents in the market, indicate that the number of generics available in a specific market has a significant positive impact on the relative price of originators, thereby making originators relatively more expensive compared to their generic competitors. At the same time, the results show that the absolute price of the originator brand medicines declines as the number of generic equivalents in the market increases.

Practical implications

The results indicate that, for all modules pooled together, the relative price of the originator product to that of the generic equivalent, is responsible for a significant reduction in the relative change in the market share of the originator medicine. When analysed on the level of anatomical class, or the individual molecule, results are not consistent. For affordable healthcare, the results support the reduction in barriers to entry for generic medicine. Furthermore, the results support education and incentives for doctors, pharmacists and end‐users to develop generic alternatives as trusted brands in their own right.

Originality/value

This study quantitatively assesses the effect that generic medicine competition exerts on the market share of originator medicines in South Africa.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 7 no. 2
Type: Research Article
ISSN: 1750-6123

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Article
Publication date: 12 April 2013

Shazad Mustapha Mohammed and Paul W. Miniard

The purpose of this paper is to assess the robustness of effects found by Barone et al. that partially comparative pricing enhances consumers' relative price beliefs about…

Abstract

Purpose

The purpose of this paper is to assess the robustness of effects found by Barone et al. that partially comparative pricing enhances consumers' relative price beliefs about its comparatively priced products, but risks adversely affecting these beliefs about the retailer's non‐comparatively priced products.

Design/methodology/approach

Research uses an experimental methodology in which the presence or absence of a price comparison is manipulated and the effects on relative price beliefs about non‐comparatively priced products are assessed.

Findings

Four studies replicated Barone et al.'s findings that a competitive price comparison enhances consumers' relative price beliefs about comparatively priced products, but did not replicate their findings that these beliefs about the non‐comparatively priced products are affected adversely unless suspicion was induced experimentally. Otherwise, consumer suspicion about the lack of price comparisons, found to be a driver of the adverse effects in Barone et al., did not spontaneously emerge in the current research.

Research limitations/implications

Research examines only university students in a controlled setting devoid of real‐world distractions. Like Barone et al., effects focus on non‐comparatively priced products in categories lacking any price comparison rather than the non‐comparatively priced products residing within the same category as the comparatively priced product. Findings reinforce the value of replication.

Practical implications

The potential risks to retailers of using partially comparative pricing appear far less prevalent than observed previously.

Originality/value

The paper raises questions about the stability of consumer response, particularly those involving consumer suspicion, to pricing tactics.

Details

Journal of Product & Brand Management, vol. 22 no. 2
Type: Research Article
ISSN: 1061-0421

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Book part
Publication date: 5 January 2006

Marianne Ward and John Devereux

We provide new measures of relative UK and US GDP per capita and output per worker for the crucial years between 1830 and 1870. Our estimates are current price comparisons…

Abstract

We provide new measures of relative UK and US GDP per capita and output per worker for the crucial years between 1830 and 1870. Our estimates are current price comparisons that compare expenditure on GDP for five benchmark years using new price data. They show that the US leads in income per capita and output per worker compared to Great Britain and the United Kingdom. We check our estimates against sectoral productivity data and real wages.

Details

Research in Economic History
Type: Book
ISBN: 978-1-84950-379-2

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Book part
Publication date: 1 January 2001

Peter B. Dixon and Maureen T. Rimmer

Abstract

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Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH
Type: Book
ISBN: 978-0-44451-260-4

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