The Moscow Market in Country's Economic Space

MPRA Paper No. 80901

27 Pages Posted: 13 Nov 2017

See all articles by Konstantin Gluschenko

Konstantin Gluschenko

Institute of Economics and Industrial Engineering, Siberian Branch of the Russian Academy of Sciences; Department of Economics, Novosibirsk State University

Date Written: August 21, 2017

Abstract

This paper studies integration of the Moscow market for final goods with markets of all other Russian regions. It considers an aggregated market represented by a minimum food basket. The law of one price serves as a criterion of market integration. It is a base for constructing time series models of the regional costs of the staples basket over 2001–2015 relative to its cost in Moscow. Regional markets are divided into four groups: integrated with the Moscow market, conditionally integrated with it, not integrated but tending towards integration with the Moscow market, and neither integrated nor tending towards integration. Nonlinear time series models with asymptotically decaying trends describe the movement towards integration (price convergence).

Keywords: market integration, law of one price, price convergence, nonlinear trend, Russian regions

JEL Classification: C32, L81, P22, R15

Suggested Citation

Gluschenko, Konstantin, The Moscow Market in Country's Economic Space (August 21, 2017). MPRA Paper No. 80901, Available at SSRN: https://ssrn.com/abstract=3068717 or http://dx.doi.org/10.2139/ssrn.3068717

Konstantin Gluschenko (Contact Author)

Institute of Economics and Industrial Engineering, Siberian Branch of the Russian Academy of Sciences ( email )

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Department of Economics, Novosibirsk State University ( email )

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Russia
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HOME PAGE: http://pub.econom.nsu.ru/staff/chair_et/gluschenko/index.htm

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