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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
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    4. 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.
    5. 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.
    6. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
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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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