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| Author | : Miklós Koren |
| Publisher | : |
| Total Pages | : 17 |
| Release | : 2004 |
| Genre | : |
| ISBN | : 9789639588233 |
| Author | : Charles Engel |
| Publisher | : |
| Total Pages | : 56 |
| Release | : 1995 |
| Genre | : Marketing channels |
| ISBN | : |
We find evidence that the law of one price (LOOP) holds more nearly for country pairs that are within geographic regions than for country pairs that are not. These findings are established using disaggregated consumer price data from 23 countries (including data from eight North American cities). We find that failures of LOOP are closely related to nominal exchange rate variability, suggesting a link to sticky nominal prices. We also find that distance can explain failures of LOOP, suggesting the failures arise from imperfect market integration. However, these two sources do not explain all of the failure of LOOP. We speculate that integrated marketing and distribution systems within regions cause LOOP to hold more nearly intraregionally. We present a formal model of marketing and distribution to illustrate this hypothesis.
| Author | : T. Schatteles |
| Publisher | : |
| Total Pages | : 66 |
| Release | : 1983 |
| Genre | : |
| ISBN | : |
| Author | : J. Chami Batista |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2020 |
| Genre | : |
| ISBN | : |
The link between relative prices across countries and trade costs requires a theoretical foundation that is absent in the literature to date. Empirical tests on the law of one price are based on an arbitrage equation, which is of very limited relevance in understanding this link. The application of a new set of arbitrage equations to the tin trade market yields results that are consistent with our theoretical expectations. We find evidence in favor of the law of one price between the United States and Japan. However, evidence of price discrimination is also found for the Los Angeles market.
| Author | : In-gu Yi |
| Publisher | : |
| Total Pages | : 156 |
| Release | : 2005 |
| Genre | : Arbitrage |
| ISBN | : |
| Author | : Andrew Atkeson |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2008 |
| Genre | : Foreign exchange rates |
| ISBN | : |
| Author | : Lawrence S. Davidson |
| Publisher | : |
| Total Pages | : 52 |
| Release | : 1982 |
| Genre | : Prices |
| ISBN | : |
| Author | : Mr.Peter B. Clark |
| Publisher | : International Monetary Fund |
| Total Pages | : 40 |
| Release | : 1997-10-01 |
| Genre | : Business & Economics |
| ISBN | : 1451936621 |
This paper investigates the consequences of exchange rate volatility on the variability of export prices and quantities in the presence of market segmentation and pricing to market. Firms stabilize destination prices through systematic price discrimination, limiting the degree of exchange rate pass-through. Consequently, the variability of exchange rates is not fully translated into prices and quantities at the point of destination. Empirical estimates using aggregate price data for the G-7 industrial countries show incomplete pass-through in variances, with considerable variation among these countries. U.S. industry specific data also indicate incomplete pass-through in most cases, with considerable variation across industries.
| Author | : Camila Casas |
| Publisher | : International Monetary Fund |
| Total Pages | : 62 |
| Release | : 2017-11-22 |
| Genre | : Business & Economics |
| ISBN | : 1484330609 |
Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.
| Author | : |
| Publisher | : Oxford University Press |
| Total Pages | : 263 |
| Release | : 2009 |
| Genre | : Business & Economics |
| ISBN | : 9774163036 |
Since 2004, economic reforms in Egypt have led to robust expansion, a healthy external position, and enhanced investor confidence. But despite these positive macroeconomic developments, inflation has been steadily rising. Does fiscal policy threaten price stability? Does wage growth in the Egyptian economy lead price inflation, or is it the reverse? In this volume, these and other questions are examined by contributors who participated in a conference held in Cairo in late 2007. Here is a coherent and comprehensive analysis of the factors driving prices in Egypt, in an attempt to find a satisfactory balance between prices and economic growth. While Egypt is the focus of the analysis, the papers draw upon the relevant literature, and international experience, the findings can be applied to other middle-income economies. This timely study helps to explain the complex issues facing economists and policymakers, with proposals for reform. Contributors: Hala Abou-Ali, Hala Fares, Omneia A. Helmy, Alaa Ibrahim, Hanaa Kheir-El-Din, Rania Al-Mashat, Diaa Noureldin, Klaus Schmidt-Hebbel, and Sherine Al-Shawarby.
