Suchergebnisse

In this paper an attempt has been made to explore the major
causes of price level changes in West Pakistan during the past thirteen
years and to deter¬mine their relative importance in explaining the
price fluctuations. A supple¬mentary object of the paper is to develop a
predictive mechanism which may be used to forecast the response of price
level to changes in the explanatory variables used in the regression
model. There is vast literature on inflation theory [3] but not so much
on quanti¬tative evidence. Broadly, there are three groups of theories
of inflation: the demand pull theories, which state that inflationary
pressures result from aggregate demand exceeding aggregate supply at
full employment; the cost-push theories, which stress the producers'
power to pass on cost increases in higher prices even when demand
remains unchanged. The third group of theories, which take a mid-way
position between the demand-pull and the cost-push theories, are a
number of structural theories, notably those associated with the names
of Ackley, Eckstein, and Schultze [1,5,11]. According to Ackley,
inflation results from mark-up of prices. He considers the price
policies of the firms and the wage policies of the labour unions to be
responsible for inflation. He puts forward the hypothesis that mark ups
used by business in setting prices and those applied by the labour
unions to their cost of living for getting higher wages tend to rise in
an inflationary situation which results in pyramiding of costs.
Professor Otto Eckstein advances the hypothesis that inflation may be
caused by price increases in certain bottleneck industries even when
there is no over-all excess demand in the economy.

PurposeShanghai is the most important economic centre in China. It also has the nation's largest modern office market in terms of floorspace and investment values. However, as with office markets in other cities and countries, the Shanghai market displays rental volatility. This paper aims to examine this issue.Design/methodology/approachRental volatility is examined by econometrically constructing a long‐run equilibrium relationship between rent and underlying demand and supply side factors. In order to establish the validity of this model, it is tested for the presence of a cointegrating vector. From this a short‐run dynamic adjustment model is constructed. This is an error correction mechanism that links the short‐ and long‐run models. The impact of office vacancies, foreign direct investment, and changes in the real interest rate on the office market are explicitly considered.FindingsThe results indicate that both demand (as represented by gross domestic product (GDP)) and supply (stock) are significant determinants of rents. Space demand is found to be both price and income elastic. In the short‐run model the error correction term is significant and correctly signed. In comparison to other office markets, the Shanghai market adjusts rather slowly. Foreign direct investment is found to have a positive impact on long‐run rents and the vacancy rate is found to impact on short‐term rental adjustment.Originality/valueThe Shanghai office market is the most important in China. However, it has displayed significant rental volatility. This paper is the first to examine explicitly the rental adjustment process in this office market. The results suggest a market that is performing as expected by economic theory but which nevertheless displays relatively slow adjustment to market imbalances.