Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27660
Authors: 
Fischer, Christoph
Year of Publication: 
2009
Series/Report no.: 
Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2009,06
Abstract: 
The establishment of European monetary union (EMU) was widely expected to cause price convergence among member states. In an investigation of this claim, the present study avoids problems of comparability and representativeness by using an extremely detailed and comprehensive scanner database on washing machine prices and sales volumes for 17 European countries. A hedonic regression yields country-specific time series for quality-adjusted price differentials. Statistically and economically significant deviations from the LOP emerge. Log t tests firmly reject price convergence among EMU countries. Small convergence clusters can be identified but they are unrelated to EMU membership.
Subjects: 
price convergence
LOP
euro introduction
log t test
hedonic price regression
scanner data
JEL: 
E31
F31
F36
C23
L68
Document Type: 
Working Paper

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