This paper examines the relationships between movements in primary commodity prices and changes in inflation in the large industrial countries. It begins by developing a two-country model in order to examine the theoretical effects of monetary, fiscal, and supply-side disturbances on commodity...

This paper investigates the importance of markup behavior in Japanese manufacturing. According to the evidence presented, Japanese firms have varied the markups of prices over marginal costs in order to limit the effects of exchange rate changes on output. This behavior is quite different from...

In the spring of 1981 the U.S. dollar began a four-year period of real appreciation that took it to a peak of more than 50 percent by first quarter 1985. Since then, the dollar has depreciated substantially, but remains above its 1980 level. During the same period, the Japanese yen first...

A two-country theoretical model is presented, showing the effects of monetary, fiscal, and supply-side disturbances on prices of primary commodities and manufactured goods, and on exchange rates. If monetary shocks dominate, then commodity prices should lead general price movements, and the...