Russia's Internal Border

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Russia's Internal Border

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Daniel Berkowitz
David DeJong

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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.

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Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 189.

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Date of creation: 01 Jul 1998
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Handle: RePEc:wdi:papers:1998-189

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Article
- Berkowitz, Daniel & DeJong, David N., 1999. "Russia's internal border," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 633-649, September. [Downloadable!] (restricted)

Find related papers by JEL classification:
P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

This paper has been announced in the following NEP Reports:

NEP-ALL-2002-04-03 (All new papers)

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