Distribution Dynamics of Food Price Inflation Rates in EU: An Alternative Conditional Density Estimator Approach

Angelos Liontakis () and Christos T. Papadas ()
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Angelos Liontakis: Agricultural Economics and Rural Development Department, Agricultural University of Athens
Christos T. Papadas: Agricultural Economics and Rural Development Department, Agricultural University of Athens

No 2010-6, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics

Abstract: Concepts and developments in the literature of economic growth and convergence have recently been adopted and used in the study of inflation rate convergence. This paper examines initially the existence of â-convergence, as mean reversion, of food price inflation rates in the European Union, using the stochastic convergence approach of panel data unit root tests. It examines also the existence of ó-convergence but in order capture sufficiently the evolving distributional dynamics, non-parametric econometric methods are implemented as well. An alternative conditional density estimator, proposed in the literature, is applied for this reason. This estimator is chosen as superior, not only to the restrictive discrete Markov chain approaches but also to the usual estimators of conditional densities using stochastic kernels. Monthly data on the EU harmonized consumer price indices of food and eleven specific food product subgroups are used, for the 15 older EU member states, covering the 1997-2009 period.

Keywords: Kernel density estimator; convergence; distribution dynamics; food price inflation (search for similar items in EconPapers)
JEL-codes: C14 C33 E31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2010
New Economics Papers: this item is included in nep-agr, nep-eec, nep-eur and nep-mac
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