IDEAS home Printed from https://ideas.repec.org/a/rpo/ripoec/v92y2002i4p167-196.html
   My bibliography  Save this article

Deviations from Purchasing Power Parity: Any Role for the Harrod-Balassa-Samuelson Hypothesis?

Author

Listed:
  • Manuela Nenna

    () (Ministero dell’Economia e delle Finanze, Roma
    Università «La Sapienza», Roma)

Abstract

The aim of this paper is to explain relative prices divergences among cities within the same currency area, such as Italy. According to our results, we find relative prices mean reverting, but at a very slow rate. The measure of persistence is high also in a well-established “monetary union” such as Italy, where some of the standard reasons behind deviations from the parity are minimised or negligible. In this work, we suggest two main explanations. First, arbitrage impediments due to transportation costs, account for part of this divergence. Second, the Harrod-Balassa-Samuelson effect is also found to be partially responsible for such persistence.

Suggested Citation

  • Manuela Nenna, 2002. "Deviations from Purchasing Power Parity: Any Role for the Harrod-Balassa-Samuelson Hypothesis?," Rivista di Politica Economica, SIPI Spa, vol. 92(4), pages 167-196, July-Augu.
  • Handle: RePEc:rpo:ripoec:v:92:y:2002:i:4:p:167-196
    as

    Download full text from publisher

    File URL: http://www.rivistapoliticaeconomica.it/2002/lug-ago/nenna.php
    Download Restriction: Payment required

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicola Amendola & Giovanni Vecchi & Bilal Al Kiswani, 2009. "Il costo della vita al Nord e al Sud d’Italia, dal dopoguerra a oggi. Stime di prima generazione," Rivista di Politica Economica, SIPI Spa, vol. 99(2), pages 3-34, April-Jun.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rpo:ripoec:v:92:y:2002:i:4:p:167-196. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabrina Marino). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.