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Re-examining the Asymmetric Gasoline Pricing Mechanism in EU: A Panel Threshold Analysis

Chaoyi Chen, Michael Polemis () and Thanasis Stengos ()

MPRA Paper from University Library of Munich, Germany

Abstract: We employ a pooled panel threshold model along the lines of Seo and Shin (2016) within an error correction framework to re-investigate the “rockets and feathers” hypothesis. The empirical results confirm the superiority of the threshold model compared to the baseline linear specifications, while attributing the asymmetric gasoline adjustment mechanism to Exchange Rate Pass Through (ERPT).

Keywords: Gasoline asymmetry; Threshold; ERPT; Error Correction Model; EU (search for similar items in EconPapers)
JEL-codes: C24 L16 (search for similar items in EconPapers)
Date: 2018-08-29
New Economics Papers: this item is included in nep-com, nep-ene, nep-reg and nep-tre
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