Gasoline Price Asymmetries in the Euro Zone

8 Pages Posted: 27 Mar 2012

See all articles by Michail Polemis

Michail Polemis

Hellenic Competition Commission and University of Piraeus

Panagiotis N. Fotis

Hellenic Competition Commission

Date Written: August 1, 2011

Abstract

This paper uses the generalized method of moments (GMM) estimation to a panel data error correction model (ECM) in order to measure the asymmetries in the transmission of shocks to input prices and exchange rate onto the wholesale and retail gasoline price respectively. For this purpose, we use an updated data set of weekly observations covering the period from January 2000 to February 2011 for eleven euro zone countries (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal and Spain). The results favor the common perception that retail and wholesale gasoline prices respond asymmetrically to cost increases and decreases.

Keywords: Generalized method of moments, panel data, asymmetries, euro zone, error correction models

JEL Classification: L11, C51, C33

Suggested Citation

Polemis, Michail and Fotis, Panagiotis N., Gasoline Price Asymmetries in the Euro Zone (August 1, 2011). Available at SSRN: https://ssrn.com/abstract=2010442 or http://dx.doi.org/10.2139/ssrn.2010442

Michail Polemis (Contact Author)

Hellenic Competition Commission and University of Piraeus ( email )

1A KOTSIKA STREET
80 KARAOLI & DIMITRIOU STREET
ATHENS
Greece

Panagiotis N. Fotis

Hellenic Competition Commission ( email )

Kotsika 1A Street & Patision
ATHENS, 10434
Greece

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