The Moscow market in the country’s economic space

Konstantin Gluschenko

Applied Econometrics, 2017, vol. 48, 5-21

Abstract: This paper studies integration of the Moscow market for final goods with markets of all other Russian regions. It considers an aggregated market represented by a minimum food basket. The law of one price serves as a criterion of market integration. It is a base for constructing time series models of the regional costs of the staples basket over 2001–2015 relative to its cost in Moscow. Regional markets are divided into four groups: integrated with the Moscow market, conditionally integrated with it, not integrated but tending towards integration with the Moscow market, and neither integrated nor tending towards integration. Nonlinear time series models with asymptotically decaying trends capture a movement towards integration (price convergence).

Keywords: market integration; law of one price; price convergence; nonlinear trend; Russian regions (search for similar items in EconPapers)
JEL-codes: C32 L81 P22 R15 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (3)

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