The Moscow market in country’s economic space

Gluschenko, Konstantin (2017): The Moscow market in country’s economic space.

Abstract

This paper studies integration of the Moscow market for final goods with markets of all other Russian regions. It considers an aggregated market represented by a minimum food basket. The law of one price serves as a criterion of market integration. It is a base for constructing time series models of the regional costs of the staples basket over 2001–2015 relative to its cost in Moscow. Regional markets are divided into four groups: integrated with the Moscow market, conditionally integrated with it, not integrated but tending towards integration with the Moscow market, and neither integrated nor tending towards integration. Nonlinear time series models with asymptotically decaying trends describe the movement towards integration (price convergence).

• Item Type: MPRA Paper
• Language: English
• Keywords: market integration, law of one price; price convergence; nonlinear trend; Russian regions
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; L - Industrial Organization > L8 - Industry Studies: Services > L81 - Retail and Wholesale Trade ; e-Commerce; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P22 - Prices; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

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