Work

Price Index Convergence Among United States Cities*

Year: 2002

Type: article

Abstract: We study the dynamics of price indices for major U.S. cities using panel econometric methods and find that relative price levels among cities mean revert at an exceptionally slow rate. In a panel of 19 cities from 1918 to 1995, we estimate the half‐life of convergence to be approximately nine years. The surprisingly slow rate of convergence can be explained by a combination of the presence of transportation costs, differential speeds of adjustment to small and large shocks, and the inclusion of nontraded goods prices in the overall price index.

Source: International Economic Review

DOI: 10.1111/1468-2354.t01-1-00049

Authors: Stephen G. Cecchetti, Nelson C. Mark, Robert J. Sonora

Institutions: National Bureau of Economic Research, The Ohio State University, North Carolina State University, University of Canterbury, University of Otago

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Sustainable cities and communities

Open Access status: green

OpenAlex ID: W2018635163

FWCI: 18.94

Cites: 42

Cited by: 287

Related to: 10