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Price Convergence in the European Car Market

  • Salvador Gil-Pareja
  • Simón Sosvilla-Rivero

This paper examines price convergence in the European Union Car market over the period 1995-2005. The results indicate that there is a clear evidence of price convergence among the EU15 countries, but not before 1999. Moreover, countries of the Economic and Monetary Union started convergence previously to the EU15 as a whole. Finally, exchange rate changes has significantly contributed to price dispersion over time across countries

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Paper provided by FEDEA in its series Working Papers with number 2005-22.

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Handle: RePEc:fda:fdaddt:2005-22
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  1. Dominique Gross & Nicolas Schmitt, 1996. "Exchange rate pass-through and rivalry in the Swiss automobile market," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(2), pages 278-303, September.
  2. Alejandro Micco & Ernesto H. Stein & Guillermo Luis Ordoñez, 2003. "The Currency Union Effect on Trade: Early Evidence from EMU," Research Department Publications 4339, Inter-American Development Bank, Research Department.
  3. Friberg, Richard, 2000. "Two monies, two markets? Variability and the option to segment," SSE/EFI Working Paper Series in Economics and Finance 349, Stockholm School of Economics.
  4. Pawel GAJEWSKI & Jakub KOWALSKI, . "Price Convergence in the European Union Countries," EcoMod2004 330600057, EcoMod.
  5. Miriam Camarero & Vicente Esteve & Cecilio Tamarit, 2000. "Price convergence of peripheral European countries on the way to the EMU: A time series approach," Empirical Economics, Springer, vol. 25(1), pages 149-168.
  6. David C. Parsley & Shang-Jin Wei, 2001. "Limiting Currency Volatility to Stimulate Goods Market Integration: A Price Based Approach," NBER Working Papers 8468, National Bureau of Economic Research, Inc.
  7. John H. Rogers, 2002. "Monetary union, price level convergence, and inflation: how close is Europe to the United States?," International Finance Discussion Papers 740, Board of Governors of the Federal Reserve System (U.S.).
  8. John H. Rogers & Gary Clyde Hufbauer & Erika Wada, 2001. "Price Level Convergence and Inflation in Europe," Working Paper Series WP01-1, Peterson Institute for International Economics.
  9. Charles Engel & John H. Rogers, 2004. "European product market integration after the euro," Economic Policy, CEPR;CES;MSH, vol. 19(39), pages 347-384, 07.
  10. Salvador Gil-Pareja & Simón Sosvilla-Rivero, 2004. "Export market integration in the European Union," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 271-301, November.
  11. Michael R. Baye & J. Rupert J. Gatti & Paul Kattuman & John Morgan, 2005. "Did the Euro Foster Online Price Competition? Evidence from an International Price Comparison Site," Working Papers 2005-09, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  12. Francisco Ledesma-Rodriguez & Manuel Navarro-Ibanez & Jorge Perez-Rodriguez & Simon Sosvilla-Rivero, 2005. "Assessing the credibility of a target zone: evidence from the EMS," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2265-2287.
  13. Maurice J.G. Bun & Franc J.G.M. Klaassen, 2002. "Has the Euro increased Trade?," Tinbergen Institute Discussion Papers 02-108/2, Tinbergen Institute.
  14. Sergio de Nardis & Claudio Vicarelli, 2003. "The Impact of Euro on Trade: The (Early) Effect is not so Large," ISAE Working Papers 31, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  15. Goldberg, Pinelopi & Verboven, Frank, 2001. "Market Integration and Convergence to the Law of One Price: Evidence from the European Car Market," CEPR Discussion Papers 2926, C.E.P.R. Discussion Papers.
  16. Gagnon, Joseph E. & Knetter, Michael M., 1995. "Markup adjustment and exchange rate fluctuations: evidence from panel data on automobile exports," Journal of International Money and Finance, Elsevier, vol. 14(2), pages 289-310, April.
  17. Goldberg, Pinelopi Koujianou & Verboven, Frank, 1998. "The Evolution of Price Dispersion in the European Car Market," CEPR Discussion Papers 2029, C.E.P.R. Discussion Papers.
  18. Robert C. Feenstra & Joseph E. Gagnon & Michael M. Knetter, 1993. "Market Share and Exchange Rate Pass-Through in World Automobile Trade," NBER Working Papers 4399, National Bureau of Economic Research, Inc.
  19. Matthias Lutz, 2004. "Pricing in Segmented Markets, Arbitrage Barriers, and the Law of One Price: Evidence from the European Car Market," Review of International Economics, Wiley Blackwell, vol. 12(3), pages 456-475, 08.
  20. Matthias Lutz, 2003. "Price Convergence under EMU? First Estimates," University of St. Gallen Department of Economics working paper series 2003 2003-08, Department of Economics, University of St. Gallen.
  21. Chen, Natalie, 2002. "The Behaviour of Relative Prices in the European Union: A Sectoral Analysis," CEPR Discussion Papers 3320, C.E.P.R. Discussion Papers.
  22. Salvador Gil Pareja, 2001. "Pricing to market in European automobile exports to OECD countries: a panel data approach," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1845-1856.
  23. Hamid Faruqee, 2004. "Measuring the Trade Effects of EMU," IMF Working Papers 04/154, International Monetary Fund.
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  25. repec:dgr:uvatin:20020108 is not listed on IDEAS
  26. Pinelopi Koujianou Goldberg & Frank Verboven, 2004. "Cross-country price dispersion in the euro era: a case study of the European car market," Economic Policy, CEPR;CES;MSH, vol. 19(40), pages 483-521, October.
  27. Gil-Pareja, Salvador, 2003. "Pricing to market behaviour in European car markets," European Economic Review, Elsevier, vol. 47(6), pages 945-962, December.
  28. Simon Sosvilla-Rivero & Salvador Gil-Pareja, 2004. "Price convergence in the European Union," Applied Economics Letters, Taylor & Francis Journals, vol. 11(1), pages 39-47.
  29. John H. Rogers, 2001. "Price level convergence, relative prices, and inflation in Europe," International Finance Discussion Papers 699, Board of Governors of the Federal Reserve System (U.S.).
  30. Sergio De Nardis & Claudio Vicarelli, 2003. "The Impact of the Euro on Trade: The (Early) Effect is Not So Large," Economics Working Papers 017, European Network of Economic Policy Research Institutes.
  31. Gron, Anne & Swenson, Deborah L, 1996. "Incomplete Exchange-Rate Pass-Through and Imperfect Competition: The Effect of Local Production," American Economic Review, American Economic Association, vol. 86(2), pages 71-76, May.
  32. Consuelo Gámez Amián & Amalia Morales Zumaquero., 2002. "Complete or Partial Inflation Convergence in the EU?," Economic Working Papers at Centro de Estudios Andaluces E2002/09, Centro de Estudios Andaluces.
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