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Why are goods so cheap in some countries?


  • George Alessandria
  • Joseph P. Kaboski


Looking around the world, we observe substantial differences across countries in prices for most goods. These price differences also tend to be positively correlated with income differences, so that citizens of high-income countries tend to pay more for the same goods than citizens in low-income countries. In “Why Are Goods So Cheap in Some Countries?,” George Alessandria and Joseph Kaboski summarize some of the evidence related to the big price differences across countries for a broad set of goods. They then discuss the relationship between prices and income levels and some possible explanations for that relationship.

Suggested Citation

  • George Alessandria & Joseph P. Kaboski, 2008. "Why are goods so cheap in some countries?," Business Review, Federal Reserve Bank of Philadelphia, issue Q2, pages 1-12.
  • Handle: RePEc:fip:fedpbr:y:2008:i:q2:p:1-12

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    References listed on IDEAS

    1. Randolph, William C, 1988. "Housing Depreciation and Aging Bias in the Consumer Price Index," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(3), pages 359-371, July.
    2. David Genesove, 2003. "The Nominal Rigidity of Apartment Rents," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 844-853, November.
    3. Randolph, William C., 1988. "Estimation of housing depreciation: Short-term quality change and long-term vintage effects," Journal of Urban Economics, Elsevier, vol. 23(2), pages 162-178, March.
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