An empirical investigation of price convergence in the European Union.
Item
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Title
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An empirical investigation of price convergence in the European Union.
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Identifier
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AAI3063829
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identifier
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3063829
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Creator
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Goldar, Mita.
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Contributor
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Adviser: John Devereux
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Date
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2002
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, Commerce-Business
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Abstract
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This study examines the effectiveness of economic integration in the European Union (EU) by observing price convergence or divergence for individual goods and services among its member nations during 1970--1993. The convergence of prices for the same goods and services is used here to gauge the degree to which the economic objectives of integration are being achieved by the member nations of the EU. The convergence at aggregate price level is also examined. Price convergence between the nine 'late-joiner' and the 'original-six' countries is tested from 1960--1992. Price convergence for the original six members of the EU is also examined from 1958--2000 to determine the extent of economic integration.;This study expands similar research in this area by performing a longitudinal study of price movements before and after unification. It examines the impact of economic integration in the context of the European Union for the new members by comparing the price movements before and after the admittance to the EU.;While price convergence is not observed for the entire period of 1970--1993 and for all commodities, it is observed during some of the periods. The convergence seems to be driven by the non-tradables, i.e., after unification, the non-tradables become more competitive and hence the decrease in dispersion in price differentials between a 'late-joiner' and the 'original-six' countries. The aggregate price levels even among the 'original-six' countries also do not exhibit convergence across time consistently, which leads to the conclusion that other economic, socio-political, geographical, regulatory, and institutional factors may have more influence on prices than just the economic integration alone. Besides, actual economic integration is a slow process and does not necessarily start immediately when a new member is admitted.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
