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Distribution Dynamics of Food Price Inflation Rates in EU: An Alternative Conditional Density Estimator Approach

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  • Angelos Liontakis

    ()
    (Agricultural Economics and Rural Development Department, Agricultural University of Athens)

  • Christos T. Papadas

    ()
    (Agricultural Economics and Rural Development Department, Agricultural University of Athens)

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    Abstract

    Concepts and developments in the literature of economic growth and convergence have recently been adopted and used in the study of inflation rate convergence. This paper examines initially the existence of â-convergence, as mean reversion, of food price inflation rates in the European Union, using the stochastic convergence approach of panel data unit root tests. It examines also the existence of ó-convergence but in order capture sufficiently the evolving distributional dynamics, non-parametric econometric methods are implemented as well. An alternative conditional density estimator, proposed in the literature, is applied for this reason. This estimator is chosen as superior, not only to the restrictive discrete Markov chain approaches but also to the usual estimators of conditional densities using stochastic kernels. Monthly data on the EU harmonized consumer price indices of food and eleven specific food product subgroups are used, for the 15 older EU member states, covering the 1997-2009 period.

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    Bibliographic Info

    Paper provided by Agricultural University of Athens, Department Of Agricultural Economics in its series Working Papers with number 2010-6.

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    Length: 27 pages
    Date of creation: 2010
    Date of revision:
    Handle: RePEc:aua:wpaper:2010-6

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    Keywords: Kernel density estimator; convergence; distribution dynamics; food price inflation;

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