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On the Relevance and Nature of Regional Inflation Differentials: the Case of Spain

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Author Info
Enrique Alberola
José M. Marqués

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Abstract

This paper studies two aspects of the behaviour of provincial relative prices in Spain: the relevance and the nature of provincial inflation divergences and relative price shifts. Inflation differentials are found to be small (the range is less than half point per year in the long-run), but deviations of relative prices from equilibrium can be very persistent.

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File URL: http://www.bde.es/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/99/Fic/dt9913e.pdf
File Format: application/pdf
File Function: First version, 1999
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Publisher Info
Paper provided by Banco de España in its series Banco de España Working Papers with number 9913.

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Length: 41 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:bde:wpaper:9913

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Related research
Keywords: PRICES ; INFLATION ; SPAIN;

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Find related papers by JEL classification:
O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584. [Downloadable!] (restricted)
  2. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know About Unit Roots," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 141-220 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  3. Parsley, David C & Wei, Shang-Jin, 1996. "Convergence to the Law of One Price without Trade Barriers or Currency Fluctuations," The Quarterly Journal of Economics, MIT Press, vol. 111(4), pages 1211-36, November. [Downloadable!] (restricted)
    Other versions:
  4. 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). [Downloadable!]
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  5. Kenneth Rogoff, 1996. "The Purchasing Power Parity Puzzle," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 647-668, June. [Downloadable!] (restricted)
  6. Andrew Levin & Chien-Fu Lin, 1993. "Unit Root Tests in Panel Data: New Results," University of California at San Diego, Economics Working Paper Series 93-56, Department of Economics, UC San Diego. [Downloadable!]
  7. Rogers, J.H. & Jenkins, M.A., 1993. "Haircuts or Hysteresis? Sources of Movements in Real Exchange Rates," Papers 4-93-6, Pennsylvania State - Department of Economics.
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  8. Bergstrand, Jeffrey H, 1991. "Structural Determinants of Real Exchange Rates and National Price Levels: Some Empirical Evidence," American Economic Review, American Economic Association, vol. 81(1), pages 325-34, March. [Downloadable!] (restricted)
  9. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fabio Busetti & Silvia Fabiani & Andrew Harvey, 2006. "Convergences of prices and rates of inflation," Temi di discussione (Economic working papers) 575, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  2. Alejandro Rodriguez Caro & Santiago Rodriguez Feijoó & Carlos Gonzalez Correa, 2005. "Markov Chain approach to Purchasing Power Convergence in the 15 European Union," ERSA conference papers ersa05p457, European Regional Science Association. [Downloadable!]
  3. Philip R. Lane & Patrick Honohan, 2003. "Divergent Inflation Rates in EMU," Trinity Economics Papers 20034, Trinity College Dublin, Department of Economics. [Downloadable!]
    Other versions:
  4. Santiago Rodriguez Feijoo & Alejandro Rodriguez Caro & Carlos Gonzalez Correa, 2003. "A measurement to analyze the relative change in the Absolute Parity of Power Purchase: An application to the European Union," ERSA conference papers ersa03p163, European Regional Science Association. [Downloadable!]
  5. Maarten Hendrikx & Bryan Chapple, 2002. "Regional Inflation Divergence in the Context of EMU," MEB Series (discontinued) 2002-19, Netherlands Central Bank, Monetary and Economic Policy Department. [Downloadable!]
  6. Carla Massidda & Paolo Mattana, 2008. "Regional productivity and relative prices dynamics: the case of Italy," The Annals of Regional Science, Springer, vol. 42(4), pages 945-966, December. [Downloadable!] (restricted)
  7. Ivo J. M. Arnold & Jan J.G. Lemmen, 2006. "Inflation Expectations and Inflation Uncertainty in the Eurozone: Evidence from Survey Data," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  8. Ivo J.M. Arnold & Clemens J.M. Kool, 2003. "The Role of Inflation Differentials in Regional Adjustment: Evidence from the United States," Working Papers 04-13, Utrecht School of Economics. [Downloadable!]
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This page was last updated on 2009-12-3.


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