No. 87. THE PRICE TRANSMISSION MECHANISM IN THE GREEK FOOD MARKET: AN EMPIRICAL APPROACH

Y. Panagopoulos, Ι. Reziti. 2006. 

 

This paper employs a general to specific approach to analyze the price transmission mechanism between producer and consumer in the Greek food sector. More specifically, the examined markets are the vegetables, the fruits and the whole food sector. Using cointegration techniques, two alternative dynamic models are estimated: an error correction model (ECM) and a LSE-Hendry general to specific model (GETS). The results indicate that a long-run relationship exists between producer and consumer for the three markets. The direction of Granger-causality runs from producer to consumer for vegetables while for food and fruits run from consumer to producer. Both models agree on the asymmetric price transmission in the fruits market. On the contrary, for the food and vegetable markets the two models disagree on the nature of the price transmission mechanism.

 

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