Price Equalization Does Not Imply Free Trade
18 Pages Posted: 29 Mar 2016 Last revised: 15 Oct 2019
There are 3 versions of this paper
Price Equalization Does Not Imply Free Trade
Federal Reserve Bank of St. Louis Working Paper No. 2012-010B
Number of pages: 31
Posted: 12 Apr 2012
Last Revised: 16 Jul 2015
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51
Price Equalization Does Not Imply Free Trade
CESifo Working Paper Series No. 4099
Number of pages: 28
Posted: 12 Feb 2013
Downloads
42
Date Written: 2015
Abstract
In this article, the authors demonstrate the possibility of price equalization in a two-country world with barriers to international trade. For price equalization to occur when the countries are asymmetric, the country with higher productivity must also be the one with the lower trade barrier. A corollary of the authors’ result is that small departures from purchasing power parity do not necessarily imply that world trade is mostly integrated.
JEL Classification: F11, F13, F14
Suggested Citation: Suggested Citation
Mutreja, Piyusha and Ravikumar, B. and Ravikumar, B. and Riezman, Raymond G. and Sposi, Michael, Price Equalization Does Not Imply Free Trade (2015). Review, Vol. 97, Issue 4, pp. 323-39, 2015, Available at SSRN: https://ssrn.com/abstract=2754969 or http://dx.doi.org/10.20955/r.2015.323-39
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