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On the Nature of Regional Price Differentials: Some Panel Results for Italy

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  • Massidda, Carla

    (U Cagliari)

  • Mattana, Paolo

    (U Cagliari)

Abstract

We combine panel data with SVECM methodologies to assess the role of real shocks in determining price differentials in Italy. The main results can be summarized as follows. At a national level, we find strong evidence of persistent price and productivity misalignments across regions. In accordance with the Balassa-Samuelson Hypothesis, such misalignments are positively correlated in all samples. Aggregate productivity seems to be the driving force at the national level. The adjustment mechanism is rather intricate and changes across the country. The retrieval of the structural coefficients is also rich in powerful insights into the functioning of the Italian economy.

Suggested Citation

  • Massidda, Carla & Mattana, Paolo, 2006. "On the Nature of Regional Price Differentials: Some Panel Results for Italy," The Review of Regional Studies, Southern Regional Science Association, vol. 36(3), pages 400-426.
  • Handle: RePEc:rre:publsh:v:36:y:2006:i:3:p:400-426
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    1. Bella, Giovanni & Massidda, Carla & Mattana, Paolo, 2014. "The relationship among CO2 emissions, electricity power consumption and GDP in OECD countries," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 970-985.

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    More about this item

    Keywords

    Aggregate Productivity; Prices; Productivity; Regional; Regions;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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