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

Nikolaos Dritsakis, Antonios Adamopoulos
European Research Studies Journal, Volume VII, Issue 3-4, 53-64, 2004
EOI: 10.11214/thalassinos.07.02.004

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.


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