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The Causal Relationship Between Domestic Private Consumption and Wholesale Prices: The Case of European Union

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  • Nikolaos Dritsakis
  • Antonios Adamopoulos

Abstract

The purpose of this paper is to investigate and measure the proportion of changes in wholesale prices transferred to private consumption prices in European Union economy. The data used in the investigation are monthly, covering the period from 1996:9 to 2001:7 and refer to consumer price indexes and wholesale price indexes of all products. Cointegration method is used in order to investigate the cost transfer from wholesale prices to consumer prices, or in other words to test the existence or not of a long-term equilibrium relationship between the two prices.

Suggested Citation

  • Nikolaos Dritsakis & Antonios Adamopoulos, 2004. "The Causal Relationship Between Domestic Private Consumption and Wholesale Prices: The Case of European Union," European Research Studies Journal, European Research Studies Journal, vol. 0(3-4), pages 53-64.
  • Handle: RePEc:ers:journl:v:vii:y:2004:i:3-4:p:53-64
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    References listed on IDEAS

    as
    1. Charles B. Moss, 1992. "The Cost-Price Squeeze in Agriculture: An Application of Cointegration," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 14(2), pages 205-213.
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    3. Granger, Clive W J, 1986. "Developments in the Study of Cointegrated Economic Variables," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 213-228, August.
    4. John C. Robertson & David Orden, 1990. "Monetary Impacts on Prices in the Short and Long Run: Some Evidence from New Zealand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 160-171.
    5. Efstratios Loizou & Kostandinos Mattas & Angelos Pagoulatos, 1997. "Macro-monetary effects on agricultural prices: the case of Greek agriculture," Applied Economics Letters, Taylor & Francis Journals, vol. 4(7), pages 397-400.
    6. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    7. Katsouli, E. & Vogiatzis, A. & Manitsaris, A., 2002. "Linking consumer prices to wholesale prices: Error correction models for the case of Greece," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 3(01), pages 1-11, January.
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    More about this item

    Keywords

    Private Consumption; Wholesale Price Index; Granger causality; Cointegration; Error Correction Models; European Union;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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