Update price index matrix for Caliendo and Parro (2015)

Source: R/model_caliendo_parro_2015.R

Update price index following Caliendo & Parro (2015) equation (11).

update_price_index_cp_2015(
  price_change,
  trade_share,
  trade_cost_change,
  input_cost_change,
  trade_elasticity,
  model_dimensions
)

Arguments

price_change

Matrix of price index changes, dimensions: sector x country.

trade_share

Array of initial trade flows, dimensions: origin x destination x sector.

trade_cost_change

Array of change in trade costs, dimensions: origin x destination x sector.

input_cost_change

Matrix of input cost changes, dimensions: sector x country.

trade_elasticity

Positive Frechet trade elasticity theta, dimensions: sector.

model_dimensions

List of model dimensions.

Value

Matrix of changes in price index, dimensions: sector x country.