THE WORLD PRİCE METHODOLOGY FOR SHADOW PRICING: THEORY AND PRACTICE

Date

1984

Author

NAS, Tevfik

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Attention is given to the gap between the theory and practice of shadow pricing. Various real worîd conditions that must be inc- luded in the theory are described, then it is shown how theory fails to represent these conditions in application. The emphasis is on the limitations of available information and the restrictions of world price methodology in real world situations. The argument is that ııeither the theoretical base nor the application models prove use- ful when ali the imperfections and complexities of real vvorîd eco- nomies are confronted. To upgrade the reîiability of estimation procedures, it is suggested that detailed procedures can be used in collecting and processing relevant information on the basis of spe- cific commodities. Unlike previous practices, such procedures could account for a number of market imperfections and trade restrictions simultaneously and adiust easily to intertemporal pri- ce variations resulting from society's future public and foreign tra- de policies.

URI

https://hdl.handle.net/11511/110916

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Department of Economics, Article