On price convergence in Eurozone

David Guerreiro and Valérie Mignon ()

Economic Modelling, 2013, vol. 34, issue C, 42-51

Abstract: We investigate price level convergence with Germany in eleven countries belonging to the Eurozone between January 1970 and July 2011. Relying on smooth transition regression models, we show that the price convergence process is nonlinear, depending on the size of the price differential: for most countries, price convergence occurs only when price differentials with Germany exceed a certain threshold. Moreover, our findings put forward some heterogeneity across the Eurozone members in terms of price convergence speed, that can be explained by the evolution of price-competitiveness, rigidities in labor markets, but also by specialization patterns.

Keywords: Price convergence; Eurozone; Smooth transition regression models; Half-life (search for similar items in EconPapers)
JEL-codes: C22 E31 F15 F41 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999312004130
Full text for ScienceDirect subscribers only

Related works:
Working Paper: On price convergence in Eurozone (2013)
Working Paper: On price convergence in Eurozone (2011)
Working Paper: On price convergence in Eurozone (2011)
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:eee:ecmode:v:34:y:2013:i:c:p:42-51

DOI: 10.1016/j.econmod.2012.10.021

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().