EURO AREA PRODUCT MARKET INTEGRATION

Main Article Content

Irena Raguž Krištić Lucija Rogić Dumančić

Abstract

The goal of this paper is to determine if there is product market integration in the euro area (EA). The paper employs LM and RALS-LM unit root tests with two breaks on the relative price series, constructed using the seasonally adjusted monthly Harmonized Index of Consumer Prices (HICP), from 1996:01 to 2017:05. The analysis shows EA-accession related breaks in price series for most of the EA11 countries, but, apart from Malta, no such breaks for the later-EA-joiners. However, there are breaks in both EA and non-EA countries at the time of EA formation. There is also evidence of greater product market integration and less adverse effects after negative shocks in the EA12. However, unit root analysis points to a conclusion that EA membership is not a sufficient condition for product market integration and integration is not necessarily related to being an EA member.

Article Details

How to Cite
Raguž Krištić, I., & Rogić Dumančić, L. (2022). EURO AREA PRODUCT MARKET INTEGRATION. The South East European Journal of Economics and Business, 17(2), 142-153. Retrieved from https://journal.efsa.unsa.ba/index.php/see/article/view/1874
Section
Scientific and Professional papers: Economics and Business
Author Biographies

Irena Raguž Krištić, Faculty of Economics and Business Zagreb

(corresponding author)
Associate professor
Faculty of Economics and Business Zagreb
J. F. Kennedy Square 6
10000 Zagreb
Croatia
E-mail: iraguzkristic@efzg.hr ORCID: 0000-0002-1422-9282

Lucija Rogić Dumančić, Faculty of Economics and Business Zagreb

Associate professor
Faculty of Economics and Business Zagreb Croatia
E-mail: lrogic@efzg.hr
ORCID: 0000-0002-7963-4166