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Is price dynamics homogeneous across Eurozone countries?

Author

Listed:
  • David Guerreiro

  • Marc Joëts

  • Valérie Mignon

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

The aim of this paper is to investigate whether price dynamics is homogeneous across the Eurozone countries. Relying on monthly data over the January 1970~July 2011 period, we test for the absolute purchasing power parity (PPP) hypothesis through the implementation of second and third-generation panel unit root and cointegration tests. Our results show that price dynamics are heterogeneous depending on both the time period and the considered group of countries. More specifically, while PPP is validated for the core Economic Monetary Union (EMU) countries, this hypothesis does not hold for Northern peripheral economies. Turning to the Southern countries, PPP is observed only before the launch of the euro.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David Guerreiro & Marc Joëts & Valérie Mignon, 2012. "Is price dynamics homogeneous across Eurozone countries?," Post-Print hal-01385838, HAL.
    • Handle: RePEc:hal:journl:hal-01385838
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    Cited by:

    1. Guerreiro, David & Mignon, Valérie, 2013. "On price convergence in Eurozone," Economic Modelling, Elsevier, vol. 34(C), pages 42-51.
    2. Guerreiro, David, 2014. "Is the European debt crisis a mere balance of payments crisis?," Economic Modelling, Elsevier, vol. 44(S1), pages 50-56.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F15 - International Economics - - Trade - - - Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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