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Price convergence and market integration in Russia

  • Konstantin Gluschenko


After a period of growing disconnectedness of regional markets following the 1992 price liberalization in Russia, a process of improvement in market integration started since about 1994. This paper analyzes the spatial pattern of goods market integration in the country in 1994-2000, characterizing Russian regions into three states: integrated with a benchmark region, not integrated but tending toward integration with it, and not integrated and not tending toward integration. The standard AR(1) model serves to test for market integration. To capture a movement toward integration (price convergence), a nonlinear time series model with an asymptotically decaying trend is proposed. The results obtained suggest that only a bit more than one fifth of the Russian regions can be deemed not integrated and not tending toward integration with the benchmarkregion over 1994–2000.

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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number wp999.

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Length: pages
Date of creation: 01 Sep 2010
Date of revision:
Handle: RePEc:wdi:papers:2010-999
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