A Tractable Approach to Pass-Through Patterns

E. Weyl and Michal Fabinger
Additional contact information
E. Weyl: Microsoft Corporation

No 747, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: For tractability, researchers often use equilibrium models that can be solved in closed-form. In practice, this means imposing unintended substantive restrictions on incidence properties that are central to many policy questions. To overcome this limitation, we characterize a set of joint supply and demand systems yielding closed-form solutions. This class is broad enough to allow substantial flexibility and thus realism, and it nests virtually all other tractable systems in the literature. We apply these more realistic structures to a range of international trade models typically solved in closed-form, thereby deriving several applied insights about, e.g., the cyclicality of wage bargaining and the organization of supply chains. Beyond parametric examples, the Laplace Transform, a standard tool used in applied mathematics and physics in analogous settings that we exploit, provides a general approach to characterizing and approximating incidence at any degree of desired tractability.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2015/paper_747.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:747

Access Statistics for this paper

More papers in 2015 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().