Petrol and Crude Oil Prices: Asymmetric Price Transmission
AbstractThis paper examines the relationship between crude oil prices, the dollar-pound exchange rate and petrol prices in the UK over the period 1982-2001. Quantitative methods were used to examine the existence of the long-run equilibrium and test for the presence of asymmetric patterns in the short-run responses to upstream price changes. Also the degree of asymmetry in the adjustment towards long-run equilibrium was analysed. Results confirm that short-run response is greater for increases in upstream prices and that the long-run equilibrium is reached faster after increase in upstream prices. Thus the opinion held by drivers in the UK is confirmed. Detailed analysis confirmed close relationship between the asymmetry and the size and change in the market margin.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1486.
Date of creation: 2001
Date of revision: 2001
Asymmetric Price Transmission; rockets and feathers; nonlinearity; price tranmission;
Find related papers by JEL classification:
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- D49 - Microeconomics - - Market Structure and Pricing - - - Other
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
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- Angelopoulou, Eleni & Gibson, Heather D., 2010. "The determinants of retail petrol prices in Greece," Economic Modelling, Elsevier, vol. 27(6), pages 1537-1542, November.
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