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Price levels convergence of consumer expenditures in the European Union

Author

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  • M. Ševela

    (Mendel University of Agriculture and Forestry, Brno, Czech Republic)

Abstract

The convergence of price levels is one of the important aspects of a real convergence and is often viewed as a criterion for the evaluation of preparedness. The convergence process of comparative price levels can run either through the exchange rate channel and/or that of nominal prices. The paper is focused on the assessment of comparative price levels and the rate of their convergence in the enlarged European Union within the period of 1999-2003. With the exception of Cyprus, the price levels in the new EU member countries were significantly lower. The greatest differences from the price level of EU countries existed in Poland, Slovakia and Baltic countries. The new member countries differ also in the rate of convergence. When combining their initial position and the rate of convergence, it can be concluded that all countries will be able to reach 80% of the comparative price level of the European Union till the year 2010. In Poland, the development is very unfavourable because its price level will reach only 55% provided that there will be no changes in its development.

Suggested Citation

  • M. Ševela, 2006. "Price levels convergence of consumer expenditures in the European Union," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 52(5), pages 197-204.
    • Handle: RePEc:caa:jnlage:v:52:y:2006:i:5:id:5016-agricecon
    DOI: 10.17221/5016-AGRICECON
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    References listed on IDEAS

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    1. Hans–Werner Sinn, 2002. "EU Enlargement and the Future of the Welfare State," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(1), pages 104-115, February.
    2. Stephen Cecchetti & Nelson C. Mark & Robert Sonora, 1998. "Price Level Convergence Among United States Cities: Lessons for the European Central Bank," Working Papers 32, Oesterreichische Nationalbank (Austrian Central Bank).
    3. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72(6), pages 584-584.
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    Cited by:

    1. R. Kučerová & P. Žufan, 2008. "Market position of selected competitors of the Czech wine market," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 54(7), pages 343-346.
    2. Agnieszka Tłuczak, 2022. "Convergence of prices on the pig market in selected European Union countries. Case study," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(3), pages 107-115.
    3. M. Záboj, 2008. "Agricultural and food wholesale and retail trade in the intra-community trade," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 54(9), pages 419-430.

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