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Price convergence and market integration in Russia

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  • Konstantin Gluschenko

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Abstract

After a period of growing disconnectedness of regional markets following the 1992 price liberalization in Russia, a process of improvement in market integration started since about 1994. This paper analyzes the spatial pattern of goods market integration in the country in 1994-2000, characterizing Russian regions into three states: integrated with a benchmark region, not integrated but tending toward integration with it, and not integrated and not tending toward integration. The standard AR(1) model serves to test for market integration. To capture a movement toward integration (price convergence), a nonlinear time series model with an asymptotically decaying trend is proposed. The results obtained suggest that only a bit more than one fifth of the Russian regions can be deemed not integrated and not tending toward integration with the benchmarkregion over 1994–2000.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp999.

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Length: pages
Date of creation: 01 Sep 2010
Date of revision:
Handle: RePEc:wdi:papers:2010-999

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Keywords: Law of one price; Price dispersion; Non-linear trend; Russian regions.;

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References

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Citations

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Cited by:
  1. M. Ege Yazgan & Hakan Yilmazkuday, 2014. "High versus Low Inflation: Implications for Price-Level Convergence," Koç University-TUSIAD Economic Research Forum Working Papers 1412, Koc University-TUSIAD Economic Research Forum.
  2. Konstantin Gluschenko, 2010. "Price convergence and market integration in Russia," William Davidson Institute Working Papers Series wp999, William Davidson Institute at the University of Michigan.
  3. World Bank, 2011. "Russia : Reshaping Economic Geography," World Bank Other Operational Studies 13052, The World Bank.
  4. Ritola, Maria, 2008. "Price convergence and geographic dimension of market integration: Evidence from China," BOFIT Discussion Papers 13/2008, Bank of Finland, Institute for Economies in Transition.
  5. Konstantin Gluschenko, 2006. "Price Linkages of Russian Regional Markets," William Davidson Institute Working Papers Series wp839, William Davidson Institute at the University of Michigan.
  6. Gluschenko, Konstantin, 2009. "Методы Анализа Межрегионального Неравенства По Доходам И Их Приложение К России
    [Methodologies of analyzing inter-regional incom
    ," MPRA Paper 18443, University Library of Munich, Germany.
  7. Konstantin Gluschenko, 2008. "Goods Market Integration in Russia during the Economic Upturn," William Davidson Institute Working Papers Series wp921, William Davidson Institute at the University of Michigan.
  8. Gluschenko, Konstantin, 2010. "The Law of One Price in the Russian Economic Space," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 17(1), pages 3-19.

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