IDEAS home Printed from https://ideas.repec.org/p/bol/bodewp/443.html
   My bibliography  Save this paper

Country Size and the Price of Tradeables: is There Any Relationship Beyond Wishful Thinking?

Author

Listed:
  • A. Mantovani
  • G. Rossini
  • P. Zanghieri

Abstract

The existence of transport costs among countries makes prices of tradables diverge. When the market structure is a differentiated oligopoly the prices of tradables increase as a country get larger and/or richer. In a framework of economies of scale-differentiation-monopolistic competition a less definite result can be found, since it all depends on the level of transport costs and the degree of openess. First we go through some theoretical aspects of these different approaches. Then, we provide empirical tests that may be able to discriminate among the two competing approaches. The results show that a relationship exists between size, percapita incomes and prices of tradables in countries separated by some transport cost. As a country is larger prices are lower, yet they become higher if percapita income is higher.

Suggested Citation

  • A. Mantovani & G. Rossini & P. Zanghieri, 2002. "Country Size and the Price of Tradeables: is There Any Relationship Beyond Wishful Thinking?," Working Papers 443, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:443
    as

    Download full text from publisher

    File URL: https://amsacta.unibo.it/4855/1/443.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 339-412, National Bureau of Economic Research, Inc.
    2. L. Lambertini & A. Mantovani & G. Rossini, 2001. "R&D in transport and comunication in a Cournot duopoly," Working Papers 401, Dipartimento Scienze Economiche, Universita' di Bologna.
    3. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lambertini, Luca & Rossini, Gianpaolo, 2006. "Investment in transport and communication technology in a Cournot duopoly with trade," Japan and the World Economy, Elsevier, vol. 18(2), pages 221-229, March.
    2. Colombo, Luca & Lambertini, Luca & Mantovani, Andrea, 2009. "Endogenous transportation technology in a Cournot differential game with intraindustry trade," Japan and the World Economy, Elsevier, vol. 21(2), pages 133-139, March.
    3. Levent, Korap, 2007. "Modeling purchasing power parity using co-integration: evidence from Turkey," MPRA Paper 19584, University Library of Munich, Germany.
    4. Coudert, Virginie & Mignon, Valérie, 2013. "The “forward premium puzzle” and the sovereign default risk," Journal of International Money and Finance, Elsevier, vol. 32(C), pages 491-511.
    5. Karen K. Lewis, 2011. "Global Asset Pricing," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 435-466, December.
    6. YV Reddy, 2012. "Summary of the discussion," BIS Papers chapters, in: Bank for International Settlements (ed.), Financial sector regulation for growth, equity and stability, volume 62, pages 39-40, Bank for International Settlements.
    7. Salvador Gil-Pareja & Simón Sosvilla-Rivero, 2004. "Export Market Integration in the European Union," Journal of Applied Economics, Taylor & Francis Journals, vol. 7(2), pages 271-301, November.
    8. Herwartz, H. & Xu, F., 2010. "A functional coefficient model view of the Feldstein-Horioka puzzle," Journal of International Money and Finance, Elsevier, vol. 29(1), pages 37-54, February.
    9. Francesca Iorio & Stefano Fachin, 2014. "Savings and investments in the OECD: a panel cointegration study with a new bootstrap test," Empirical Economics, Springer, vol. 46(4), pages 1271-1300, June.
    10. Dal Bianco, Marcos & Camacho, Maximo & Perez Quiros, Gabriel, 2012. "Short-run forecasting of the euro-dollar exchange rate with economic fundamentals," Journal of International Money and Finance, Elsevier, vol. 31(2), pages 377-396.
    11. Manuchehr Irandoust, 2019. "Saving and investment causality: implications for financial integration in transition countries of Eastern Europe," International Economics and Economic Policy, Springer, vol. 16(2), pages 397-416, April.
    12. Joseph J. French, 2011. "The Dynamic Interaction Between Foreign Equity Flows And Returns: Evidence From The Johannesburg Stock Exchange," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 5(4), pages 45-56.
    13. Stefan Ried, 2009. "Putting Up a Good Fight: The Galí-Monacelli Model versus “The Six Major Puzzles in International Macroeconomicsâ€," SFB 649 Discussion Papers SFB649DP2009-020, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    14. Marc Flandreau & Mathilde Maurel, 2005. "Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe," Open Economies Review, Springer, vol. 16(2), pages 135-152, April.
    15. Fetzer, James J. & Rivera, Sandra A., 2005. "Modeling Modifications in Rules of Origin: A Partial Equilibrium Approach," Conference papers 331372, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
    17. Sergio Da Silva & Guilherme Moura & Sidney Caetano, 2004. "Big Mac parity, income, and trade," Economics Bulletin, AccessEcon, vol. 6(12), pages 1-8.
    18. Robert Kollmann, 2012. "Limited asset market participation and the consumption‐real exchange rate anomaly," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(2), pages 566-584, May.
    19. Hamano, Masashige, 2013. "The consumption-real exchange rate anomaly with extensive margins," Journal of International Money and Finance, Elsevier, vol. 36(C), pages 26-46.
    20. Ana Kristel Lapid & Rogelio Mercado & Peter Rosenkranz, 2023. "Concentration in Asia's cross‐border banking: Determinants and impacts," Pacific Economic Review, Wiley Blackwell, vol. 28(2), pages 267-292, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bol:bodewp:443. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dipartimento Scienze Economiche, Universita' di Bologna (email available below). General contact details of provider: https://edirc.repec.org/data/sebolit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.