Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

C. Rangarajan , Raaj Kumar Sah , K. S. Reddy

Abstract

When the price of a commodity increases, it has an impact on the prices of other commodities through the inter-industry dynamics. Earlier studies in this lield have attempted to trace, for example the effect of an increase in indirect taxes on certain commodities on the prices of the non-taxed commodities through the use of input-output table. The underlying assumption of all these studies is that the price of a commodity increases when prices of the inputs that go into the production of a commodity increase. In this paper we have attempted to present a methodology by which the impact of the increase in the price of one commodity on others can be calculated under a situation where the prices of specific commodities are not allowed to rise even though input prices go up.

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