IDEAS home Printed from https://ideas.repec.org/a/bla/worlde/v41y2018i9p2414-2438.html
   My bibliography  Save this article

Price‐level co‐movements within currency unions: An alternative integration metric

Author

Listed:
  • Gregory W. Whitten

Abstract

This paper analyses currency union integration by testing whether price levels in member countries possess a common stochastic trend. The trace statistic test for cointegration proposed by (Johansen, 1995) demonstrates the presence of such a trend for most unions. A disaggregated analysis identifies a common stochastic trend for several though fewer than half of country pairs within a union. Some unions such as the Eurozone have small shares of cointegrated country pairs. Yet, the share of cointegrated country pairs is large relative to countries outside currency unions. Comparison to a control group (country pairs where one country belongs to a given union and the other country does not) indicates that the cointegration found within a currency union is a union‐specific trait and not a feature of the individual countries within the union. These results provide an alternative metric to intraunion trade for gauging the extent of currency union integration.

Suggested Citation

  • Gregory W. Whitten, 2018. "Price‐level co‐movements within currency unions: An alternative integration metric," The World Economy, Wiley Blackwell, vol. 41(9), pages 2414-2438, September.
    • Handle: RePEc:bla:worlde:v:41:y:2018:i:9:p:2414-2438
    DOI: 10.1111/twec.12639
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/twec.12639
    Download Restriction: no
    File URL: https://libkey.io/10.1111/twec.12639?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gregory Whitten & Xiaoyi Dai & Simon Fan & Yu Pang, 2020. "Do political relations affect international trade? Evidence from China’s twelve trading partners," Journal of Shipping and Trade, Springer, vol. 5(1), pages 1-24, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:41:y:2018:i:9:p:2414-2438. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.