Regional and international market integration of a small open economy

Sebastian Fossati, Fernando Lorenzo () and Cesar M. Rodríguez ()
Additional contact information
Fernando Lorenzo: Centro de Investigaciones Económicas, Uruguay, http://www.cinve.org.uy/
Cesar M. Rodríguez: University of Pittsburgh, http://www.pitt.edu/
Authors registered in the RePEc Author Service: Cesar M. Rodriguez

Journal of Applied Economics, 2007, vol. 10, 77-98

Abstract: This paper studies the relationship between a set of commodity prices in a small open economy like Uruguay and the corresponding international and regional prices. The empirical methodology used is the multivariate cointegration procedure based on maximum likelihood methods introduced by Johansen (1988) as well as estimations of half-life persistence indicators. In the case of cereals, the evidence suggests strong market integration between domestic and regional markets and, to some extent, also to international markets. Therefore, directly or indirectly, domestic prices are connected with the efficient price signal. Results for beef indicate strong market integration between the domestic market and the regional market, which is not so well connected with international markets. Thus, domestic price appears to be linked to a regional price that is not linked to the efficient price signal.

Keywords: commodity prices; law of one price; market integration; cointegration (search for similar items in EconPapers)
JEL-codes: C5 F15 Q11 (search for similar items in EconPapers)
Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://ucema.edu.ar/publicaciones/download/volume10/fossati.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cem:jaecon:v:10:y:2007:n:1:p:77-98

Access Statistics for this article

Journal of Applied Economics is currently edited by Germán Coloma and Mariana Conte Grand and Jorge M. Streb

More articles in Journal of Applied Economics from Universidad del CEMA Contact information at EDIRC.
Bibliographic data for series maintained by Valeria Dowding ().