Country Size and the Price of Tradeables: is There Any Relationship Beyond Wishful Thinking?
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.
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- 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.
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- Maurice Obstfeld & Kenneth Rogoff, 2001. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," International Trade 0012003, EconWPA.
- Maurice Obstfeld & Kenneth Rogoff, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Working Papers 7777, National Bureau of Economic Research, Inc.
- Maurice Obstfeld and Kenneth Rogoff., 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," Center for International and Development Economics Research (CIDER) Working Papers C00-112, University of California at Berkeley.
- Obstfeld, Maurice & Rogoff, Kenneth, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," Center for International and Development Economics Research, Working Paper Series qt0sx02651, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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- 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. Full references (including those not matched with items on IDEAS)
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