Price Convergence toward the EU: A Few Open Issues
AbstractThis article attempts to answer a few open questions related to price convergence in the Czech Republic and in other Central and Eastern European Countries toward prices in the European Union. The authors address the following issues: First, what, from the theoretical viewpoint, should the quantitative relationship be between price level and GDP? Second, does the existing empirical data allow for a clear distinction between tradable and non-tradable commodities, as assumed by standard theory? Third, what is the relationship between price levels and coefficient measuring differences in the structures of relative prices in individual countries? Fourth, what are the likely forms of relative price convergence in the Czech Republic toward accession to the European Union? Fifth, what is the reason for the significantly negative residual of the Czech economy in the cross-country regressions of the average price level on GDP.
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Bibliographic InfoArticle provided by Charles University Prague, Faculty of Social Sciences in its journal Finance a uver - Czech Journal of Economics and Finance.
Volume (Year): 51 (2001)
Issue (Month): 6 (June)
relative price differentiation; inflation; sticky prices; Balassa-Samuelson effect;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F15 - International Economics - - Trade - - - Economic Integration
- P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
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- Martin Cihak & Tomas Holub, 2005. "Price Convergence in EU-Accession Countries: Evidence from the International Comparison," Economie Internationale, CEPII research center, issue 102, pages 59-82.
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