Russia's Internal Border

20 Pages Posted: 6 Oct 1998

See all articles by Daniel Berkowitz

Daniel Berkowitz

University of Pittsburgh - Department of Economics

David N. DeJong

University of Pittsburgh - Department of Economics

Date Written: July 1998

Abstract

In integrated economies, inter-city-price differences can be explained largely by transportation costs. This is not the case in Russia. Here, we argue that this is due to an internal border that separates a region we denote as the Red Belt from the rest of Russia. Regions within the Red Belt exhibit high degrees of price dispersion and thus seem isolated. Moreover, these regions have been relatively slow to adopt economic reforms, and have suffered relatively low growth rates. The impact of the border on price dispersion is shown to be comparable to the impact of the U.S.-Canadian border.

JEL Classification: P22, R12

Suggested Citation

Berkowitz, Daniel and Dejong, David N., Russia's Internal Border (July 1998). Available at SSRN: https://ssrn.com/abstract=134408 or http://dx.doi.org/10.2139/ssrn.134408

Daniel Berkowitz (Contact Author)

University of Pittsburgh - Department of Economics ( email )

4711 WWPH
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HOME PAGE: http://www.pitt.edu/~dmberk

David N. Dejong

University of Pittsburgh - Department of Economics ( email )

4A21 Forbes Quad
Pittsburgh, PA 15260
United States
(412) 648-2242 (Phone)

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