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The Law of One Price: Survey of a Failure

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  • Alessio Emanuele BIONDO

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    (University of Catania, Italy)

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    Abstract

    This paper aims to survey the literature about the Law of One Price in order to document its failure in terms of actual application. After a brief theoretical overview, which starts from classical economists' thought, the reported literature has been classified on the basis of three main streams: pricing-to-market (also considering investigations about differences between domestic and export prices), national borders, and tradability of goods. Reviewed works have been selected in order to provide a dedicated survey for 'the Law', which is absent in previous works about this topic. Therefore, the investigation has been kept intentionally separate from PPP-related debate.

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    Bibliographic Info

    Article provided by ASERS Publishing in its journal Theoretical and Practical Research in Economic Fields.

    Volume (Year): I (2010)
    Issue (Month): 2 (December)
    Pages: 168 - 182

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    Handle: RePEc:srs:tpref1:1:v:1:y:2010:i:2:p:168-182

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    Keywords: Law of one price; purchasing power parity; relative prices; exchange rate;

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