Price-Level Convergence: New Evidence from U.S. Cities
Ege Yazgan () and
Hakan Yilmazkuday ()
No 1011, DETU Working Papers from Department of Economics, Temple University
This paper tests the bilateral price-level convergence among 52 U.S. cities at the good level. We employ a new approach which is free of problems that arise when using an arbitrary benchmark, cross-section dependence, and heterogeneity. We find quite strong evidence in favor of convergence with significantly quick rates. This finding is surprising as the estimated median half lives are far below the half lives found in the corresponding studies for the U.S.
Keywords: Convergence; Micro-Level Prices; PPP Puzzle. (search for similar items in EconPapers)
JEL-codes: E31 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac, nep-opm and nep-ure
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http://www.cla.temple.edu/RePEc/documents/detu_10_11.pdf First version, 2010 (application/pdf)
Journal Article: Price-level convergence: New evidence from U.S. cities (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:tem:wpaper:1011
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