Price convergence and market integration in Russia

Konstantin Gluschenko

No wp999, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: After a period of growing disconnectedness of regional markets following the 1992 price liberalization in Russia, a process of improvement in market integration started since about 1994. This paper analyzes the spatial pattern of goods market integration in the country in 1994-2000, characterizing Russian regions into three states: integrated with a benchmark region, not integrated but tending toward integration with it, and not integrated and not tending toward integration. The standard AR(1) model serves to test for market integration. To capture a movement toward integration (price convergence), a nonlinear time series model with an asymptotically decaying trend is proposed. The results obtained suggest that only a bit more than one fifth of the Russian regions can be deemed not integrated and not tending toward integration with the benchmarkregion over 1994–2000.

Keywords: Law of one price; Price dispersion; Non-linear trend; Russian regions. (search for similar items in EconPapers)
JEL-codes: C32 P22 R10 R15 (search for similar items in EconPapers)
Pages: pages
Date: 2010-09-01
New Economics Papers: this item is included in nep-cis, nep-geo, nep-mkt and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: Price convergence and market integration in Russia (2011)
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