Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society
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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

Application of Dynamic Macroeconomic Models with Nominal Price Rigidity to the Actual Data of Public Utility Charges in Korea

Vol.26, No.1, March , 127–153


English Version |  Korean Version
  •   (Department of Economics, Seoul National University)

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Abstract  

In this paper, I develop dynamic stochastic optimizing models for public utility charges, taking into account the actual behavior of individual public utility charges in Korea. The compensation rate for the total average cost has been greater than one only for public utility services provided to households, reflecting government's regulations on public utilities. The analysis of this paper opens the possibility that existing dynamic pricing models with nominal price rigidity can be extended to explain the actual behavior of public utility charges in Korea.


Keywords
   Public Utility Charges; Nominal Price Rigidity Model, Public Utility Regulations

JEL classification codes
   E31, L97
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