Non-Linear Aspects of Goods-Market Arbitrage and Adjustment: Heckscher's Commodity Points Revisited
Journal of the Japanese and International Economies, Vol. 11, No. 4, December 1997
Posted: 29 Apr 1998
We propose that analysis of purchasing power parity (PPP) and the law of one price (LOOP) should explicitly take into account the possibility of "commodity points"--thresholds delineating a region of no central tendency among relative prices, possibly due to lack of perfect arbitrage in the presence of transaction costs and uncertainty.
JEL Classification: F31, F41
Suggested Citation: Suggested Citation