Trends in international prices
Ημερομηνία
2010Google Scholar check
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Εμφάνιση πλήρους εγγραφήςΕπιτομή
We exploit the panel dimension of a price levels dataset for more than one hundred product
items across 140 cities in 90 countries for the period from 1990 to 2009 in order to improve
our understanding of international price dispersion and the evolution of prices over time. We
consider a panel data model with exchangeable units that allows for the possibility of common
components for different dimensions of the panel. This allows one to gauge the contribution
of each dimension of the data to total variation and to disentangle the sources of potential
non-stationarity. It also allows us to identify differences in the speed of convergence for different
time-varying components in response to location-specific, product-specific, and idiosyncratic
shocks. Finally, we proceed to identify the economic determinants of different components to
show that particular dimensions of the data are more suited for examining particular theories.