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The Economic Significance of National Border Effects

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  • Carolyn L. Evans

Abstract

To address the economic significance of national border effects, this paper provides evidence on two fundamental questions: (1) Do large border effects arise because of high perceived-price wedges between foreign and domestic products, or because imports and domestic goods are very close substitutes?; and (2) If price wedges are important, do they reflect distortionary barriers to trade or do they arise from nondistortionary factors, such as differences in transactions costs or product characteristics? I conclude that, while border effects may imply barriers, welfare costs, and a role for policy, distortions are probably not as substantial as initial border results suggested. (JEL F1)

Suggested Citation

  • Carolyn L. Evans, 2003. "The Economic Significance of National Border Effects," American Economic Review, American Economic Association, vol. 93(4), pages 1291-1312, September.
  • Handle: RePEc:aea:aecrev:v:93:y:2003:i:4:p:1291-1312
    Note: DOI: 10.1257/000282803769206304
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade

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