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Economic Integration in Interwar Poland - A Threshold Cointegration Analysis of the Law of One Price for Poland (1924-1937)


  • Carsten TRENKLER
  • Nikolaus WOLF


In this paper we study the issue of economic integration in Poland between 1924 and 1937 by means of a threshold cointegration analysis of the law of one price. We find that the interwar economy can be regarded as integrated but with obvious restrictions which refer to the existence of relevant transaction costs for arbitrage and differences in the level of prices between cities. Moreover, the former partition borders within Poland did not affect economic integration suggesting that the integration policy after the reunification of Poland in 1919 was successful. However, we are not able to assess the impact of the aggregate price level which changed strongly during our sample period.

Suggested Citation

  • Carsten TRENKLER & Nikolaus WOLF, 2003. "Economic Integration in Interwar Poland - A Threshold Cointegration Analysis of the Law of One Price for Poland (1924-1937)," Economics Working Papers ECO2003/05, European University Institute.
  • Handle: RePEc:eui:euiwps:eco2003/05

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    References listed on IDEAS

    1. Enev, Tihomir & Koford, Kenneth, 2000. "The Effect of Incomes Policies on Inflation in Bulgaria and Poland," Economic Change and Restructuring, Springer, vol. 33(3), pages 141-169.
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    Cited by:

    1. Chilosi, David & Volckart, Oliver, 2009. "Money, states and empire: financial integration cycles and institutional change in Central Europe, 1400-1520," Economic History Working Papers 27884, London School of Economics and Political Science, Department of Economic History.
    2. Ihle, Rico & von Cramon-Taubadel, Stephan, 2008. "A Comparison of Threshold Cointegration and Markov-Switching Vector Error Correction Models in Price Transmission Analysis," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37603, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.

    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-

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