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Differences in Relative Prices in the EU

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  • Palenmark, Sirly

    (Department of Economics, Lund University)

Abstract

Price levels differ considerably between the member states of the EU. This paper examines what causes these price differences. Disaggregated price level indexes for 13 capital cities in the EU are used in order to investigate differences in relative prices during the 1990s. It is found that such variables as physical distance, tax levels, participation in the EMU and income levels explain differences in price levels.

Suggested Citation

  • Palenmark, Sirly, 2004. "Differences in Relative Prices in the EU," Working Papers 2004:16, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2004_016
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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP04_16.pdf
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    References listed on IDEAS

    as
    1. Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-526, June.
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    Keywords

    Relative prices; Purchasing Power Parity; Law of One Price;

    JEL classification:

    • 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

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