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Volume 52, Issue 11

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Cenová konvergence k EU: nové poznatky z Mezinárodního srovnávacího projektu 1999

Čihák, Martin; Holub, Tomáš

Year: 2002   Volume: 52   Issue: 11   Pages: 608-610

Abstract: The paper analyses, both theoretically and empirically, price level convergence and adjustment in the structures of relative prices in the transition economies of central and eastern Europe towards accession with the European Union, with a special focus on the Czech Republic. The implications for equilibrium real exchange-rate appreciation and inflation risks resulting from price convergence are discussed. The negative relationship between the degree of differences in the structures of relative prices vis-à-vis the European Union economies and the price levels in the transition economies is re-examined using data from the 1999 International Comparison Project, organized by the United Nations, OECD, and Eurostat. Calculations based on disaggregated price data are used to assess the potential problems that may stem from the relative price-adjustment process if there is a low downward flexibility of domestic nominal prices.

JEL classification: E31, E52, E58, F15, F43, P22

Keywords: price convergence; real exchange rate; inflation; relative prices; Balassa-Samuelson effect; terms of trade

RePEc: n/a

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