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The Chinese Government has promulgated the "Belt and Road Initiative" (BRI) to increase trade flows and integrate goods markets between China and BRI countries. The validity of purchasing power parity (PPP) implies well‐integrated goods markets, a precondition for further economic convergence, and the next stage of economic integration in factor, service, and financial markets. Our study aims to examine the validity of the PPP and the extent of goods market integration between China and selected BRI countries in Africa. Since the functional form of the cointegrating relationship may not be exact or linear, we adopt the nonparametric rank tests for analysis without prior knowledge and specification of the functional form. We also address the rank problems that occur in multivariate rank tests. Our empirical results provide strong evidence of an unrestricted PPP relationship with reasonably strong evidence of nonlinearity in the data. We also find that some African BRI countries have experienced goods market integration with China during the second‐half period only. This indicates that the introduction of the BRI in 2013 and China's active involvement in African economic development through BRI projects are leading to enhanced goods market integration between China and Africa. The results indicate favorable prospects of closer economic cooperation in the factor, service, and financial markets to build a free trade area or common markets with BRI countries in Africa. [ABSTRACT FROM AUTHOR]

The validity of purchasing power parity (PPP) between two economies implies goods markets of the two are well integrated. This is a pre-condition for further economic convergence. This study examines validity of the PPP between China and European countries. Since the functional form of the cointegrating relationship may not be exact or linear, we adopt the nonparametric rank tests for analysis, without prior specification of the functional form. We also address the rank problems that occur in multivariate rank tests. The results indicate strong support for nonlinear PPP relationships between China and European countries, especially during the second subsample period. This indicates China's rising economic power, particularly in the most recent decade. Although there have been disputes between China and Europe, these results suggest favorable prospects for closer economic cooperation between the two sides and the need for formulation of common policies to pursue an integrated market in the future. [ABSTRACT FROM AUTHOR]

This paper investigates one of the key factors of sustainable development in the tourism sector: productive efficiency. A firm is technically inefficient when it can produce a higher output level with existing input quantities. Technical inefficiency can be reduced by stimulating the incentive of workers and employing suitable managers. On the other hand, scale inefficiency occurs when an enterprise is not producing in the constant returns to scale region. Such inefficiency can be lessened by reallocating resources to achieve an optimal production scale. Most previous empirical studies of efficiency analysis are based on the assumption of convex production sets. This paper points out that when this assumption does not hold, policies on resources allocation would be misled. To remedy this deficiency, this paper adopts a newly developed empirical frontier to model nonconvexity in the production set. It is found that, in the tourism sector, travel agents and hotels are technically efficient and scale inefficient. Consequently, a policy which leads to the merging of small firms to improve the efficiency of the market will best suit the sustainable development of the tourism sector. Our results are very different from those derived from the existing production frontiers in Data Envelopment Analysis. [ABSTRACT FROM AUTHOR]

This paper examines the dynamic relationship between the consumer price index (CPI) and the producer price index (PPI) in the UK, France and Germany from 1997 to 2013. We employ the momentum-threshold autoregressive (MTAR) cointegration model for empirical analysis. The results show that the CPI and the PPI are cointegrated with bi-directional long-run Granger causality between CPI and PPI, signifying the existence of both demand-pull and the cost-push nature of inflation. The estimates of threshold vector error correction models (TVECMs) indicate asymmetric adjustments to equilibrium, where upward adjustments are statistically significant but downward adjustments are sluggish and insignificant. Moreover, we generate the unconditional half-life estimates as a measure of persistence, which reveal robust evidence of complex non-linearities in the adjustment process. Our overall results provide valuable information for policymakers to formulate inflation-control policies and optimal policy horizons under a non-linear framework. [ABSTRACT FROM AUTHOR]

This article examines the price convergence of beverage products within Australia in order to assess the efficacy of intranational cross-border movements of products under the Australia's Mutual Recognition Agreement. Since the cointegrating relationship between product prices may not be exact or linear, we adopt the rank tests for analysis which do not require prior knowledge and specification of the linear or nonlinear functional form. Our results validate the price convergence of all beverage products within Australia, with the exception of a few regions in the milk market. Furthermore, a subset of the cointegration relationships exhibits nonlinear long-run price co-movements. [ABSTRACT FROM AUTHOR]