This paper analyses the asymmetries in the response of petrol prices to oil price shocks. We show that previous work, based on the determination of asymmetric responses, can be improved upon by allowing for asymmetries in short term dynamics. The paper shows that a significant determinant of the response of petrol prices to oil price changes, is the extent to which petrol price can be seen to have departed from its long run equilibrium level.
|Number of pages||9|
|Journal||International Journal of the Economics of Business|
|Publication status||Published - Jul 2003|
- petrol price
- oil prices
- asymmetric adjustment