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Price Index Convergence Among Provinces and Cities of Canada: 1978 - 2001

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Author Info
Ajit Dayanandan (Department of Economics, University of Northern B.C.)
Mukesh Ralhan () (Department of Economics, University of Victoria)

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Abstract

We study the convergence of price indices for Canadian provinces and cities for the period 1978-2001 for (a) ten provinces and nine commodity/price groups; and (b) fifteen cities a cross Canada and four commodity/price groups using panel unit root tests. The empirical results reject the unit root hypothesis for price data across provinces and cities. The estimated rate of convergence in Canada is comparatively faster than the rates for similar studies reported for U.S. c ities. The empirical results also reveal a relatively faster rate of convergence during the post-inflation targeting period (1991-2001), than earlier.

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File URL: http://web.uvic.ca/econ/research/papers/ewp0504.pdf
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Publisher Info
Paper provided by Department of Economics, University of Victoria in its series Econometrics Working Papers with number 0504.

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Length: 15 pages
Date of creation: 05 May 2005
Date of revision:
Handle: RePEc:vic:vicewp:0504

Note: ISSN 1485-6441
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Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2
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Related research
Keywords: Intra-national PPP; Panel unit root; Canada; CPI; Half-life;

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Find related papers by JEL classification:
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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  3. Ng, S. & Perron, P., 1994. "Unit Root Tests ARMA Models with Data Dependent Methods for the Selection of the Truncation Lag," Cahiers de recherche 9423, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
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  4. Abuaf, Niso & Jorion, Philippe, 1990. " Purchasing Power Parity in the Long Run," Journal of Finance, American Finance Association, vol. 45(1), pages 157-74, March. [Downloadable!] (restricted)
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  10. Banerjee, Anindya, 1999. " Panel Data Unit Roots and Cointegration: An Overview," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 607-29, Special I. [Downloadable!] (restricted)
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  13. Culver, Sarah E. & Papell, David H., 1999. "Long-run purchasing power parity with short-run data: evidence with a null hypothesis of stationarity," Journal of International Money and Finance, Elsevier, vol. 18(5), pages 751-768, October. [Downloadable!] (restricted)
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  15. John F. Helliwell, 1996. "Do National Borders Matter for Quebec's Trade?," NBER Working Papers 5215, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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