Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/50423
Authors: 
Akkoyunlu, Sule
Siliverstovs, Boriss
Year of Publication: 
2010
Series/Report no.: 
KOF working papers // KOF Swiss Economic Institute, ETH Zurich 248
Abstract: 
This study addresses price convergence in two cities in Turkey (Istanbul and Ankara) using the annual data over the three quarters of the 20th century (1922-1998), characterized by prevailing high inflation rates for most of the period. In contrast to the rest of the literature addressing convergence in price levels with a typical result of extremely slow convergence rates at best, we argue that convergence is much easier detected in growth rates rather than levels of prices. We suggest using the bounds testing procedure of Pesaran et al. (2001) for this purpose. We find a clear-cut evidence on the existence of a common driving force behind inflation dynamics in Istanbul and Ankara - a finding that is intuitively appealing from the point of view of economic theory.
Subjects: 
Price convergence
Bounds testing procedure
Turkey
JEL: 
C22
C32
C52
E31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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