Using detailed micro data on European retail food prices for EU15 and all eight Central and Eastern European accession countries, we analyse price convergence within the European Union after the enlargement shock in 2004. Testing for σ-convergence, we find a strong price convergence within EU23, which is mainly explained by convergence between and not within the two subgroups of the old and the new member states.
Keywords: price convergence; sigma convergence; international price dispersion; law of one price; European Union; EU enlargement; Central and Eastern European countries; F0; F15; E31; L81
Journal Article. 6737 words. Illustrated.
Subjects: International Economics ; International Trade ; Prices, Business Fluctuations, and Cycles ; Services
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