Munich Personal RePEc Archive

Re-examining the Asymmetric Gasoline Pricing Mechanism in EU: A Panel Threshold Analysis

Chen, Chaoyi and Polemis, Michael and Stengos, Thanasis (2018): Re-examining the Asymmetric Gasoline Pricing Mechanism in EU: A Panel Threshold Analysis.

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Abstract

We employ a pooled panel threshold model along the lines of Seo and Shin (2016) within an error correction framework to re-investigate the “rockets and feathers” hypothesis. The empirical results confirm the superiority of the threshold model compared to the baseline linear specifications, while attributing the asymmetric gasoline adjustment mechanism to Exchange Rate Pass Through (ERPT).

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