Title: Determinants of price differences in Russian regions
Authors: Yury Perevyshin - The Russian Presidential Academy of National Economy and Public Administration (Russia) [presenting]
Abstract: Based on econometric methods for analyzing panel data, factors that explained price differences in the 76 Russian regions in the period 2000-2015 were determined. An explanation of the mechanisms of their influence was proposed. Problems of different price levels in countries or regions using a common currency can were listed. We tested fixed time effects model vs. pool model, took into consideration spatial autocorrelation between regions. The results show that a steady effect on regional price differences both during the whole period of the study and at individual subperiods was provided by:a) the Balassa-Samuelson effect, b) costs of trade, c) the mismatch of business cycle phases, d) the structure of the regional economy, e) the regional structure of household incomes. Regional income and price level are subject to spatial autocorrelation. The results obtained can be applied to the development of measures of regional economic policy aimed at synchronization of inflation processes, while forecasting both national and regional inflation, as well as modeling the consequences of the single monetary policy of the Bank of Russia for regional economies.