Relative Price Volatility: What Role Does the Border Play

31 Pages Posted: 10 Dec 1998

See all articles by John H. Rogers

John H. Rogers

Board of Governors of the Federal Reserve System - Trade and Financial Studies Section

Charles M. Engel

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER); University of Washington - Department of Economics

Date Written: September 1998

Abstract

We reexamine the effect of the U.S./Canadian border on integration of markets. The paper updates work from our earlier paper, Engel and Rogers(1996). We consider alternative measures of deviations from the law of one price. We pay special attention to the effect of the U.S-Canada free trade agreement on market integration. Our conclusions are unchanged: markets in the U.S. and Canada are more segmented than can be explained by the physical distance between the two locations. Formal trade barriers do not appear to explain much of that segmentation.

JEL Classification: F3

Suggested Citation

Rogers, John H. and Engel, Charles M., Relative Price Volatility: What Role Does the Border Play (September 1998). International Finance Discussion Paper No. 623. Available at SSRN: https://ssrn.com/abstract=133208 or http://dx.doi.org/10.2139/ssrn.133208

John H. Rogers (Contact Author)

Board of Governors of the Federal Reserve System - Trade and Financial Studies Section ( email )

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Charles M. Engel

University of Wisconsin - Madison - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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University of Washington - Department of Economics ( email )

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