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1 Ekonomický časopis (Journal of Economics)

1 2015

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LAW OF ONE PRICE AND THE CZECH CEREAL MARKET INTEGRATION INTO THE EU COMMON AGRICULTURAL MARKET

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Clark J. S. , Smutka L. , Čechura L. , Procházka P. , Maitah M.

Ekonomický časopis (Journal of Economics)

2015

tom 63

nr 8

817 - 836

The Czech cereal market integration into the common agricultural market (EU) is studied using monthly price data for wheat and barley in Belgium, Germany, Austria and the Czech Republic in 1993 – 2010. Stability in the law of the one price (LOP) equation is studied through multiple structural breaks within the equation. The results indicate that the integration of the Czech Republic into EU cereal markets is more unstable than that of Austria (a fourth enlargement country), although there is more empirical support for the LOP when structural breaks are taken into account. The structural change also occurred in the old EU LOP equation between Belgium and Germany.