City price convergence in Turkey with structural breaks

Faik Bilgili

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores relative price convergence for 18 cities in Turkey. The convergence implies stationarity in the long run. Henceforth, to observe whether price convergence occurs or not, this study conducts unit root tests following Lee and Strazicich (2003) with two structural breaks in level and/or trend. The test statistics reveal that 13 out of 18 consumer price indexes converge. The half-life measurement points out that the speed of convergence of each city is considerably high. This result indicates that the half of the cumulative shocks persists for a short time period.

Keywords: Lagrange multiplier unit root tests; structural breaks; price convergence; half-life; Turkish economy (search for similar items in EconPapers)
JEL-codes: C12 C13 C22 C52 D40 E31 E37 (search for similar items in EconPapers)
Date: 2011-10
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Related works:
Journal Article: City Price Convergence in Turkey with Structural Breaks (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54295

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