Two monies, two markets? Variability and the option to segment

• 成果类型: Article
• 署名作者: Friberg, R
• 署名单位: Stockholm School of Economics
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(01)00100-3
• 发表日期: 2001
• 页码: 317-327
• 关键词: exchange rate pass-through; Law of one price; EMU; price discrimination; Real options

摘要

This paper examines the decision to create barriers to arbitrage for a firm selling on two national markets. Real exchange rate changes affect the incentives to create such barriers since they influence the optimal prices. Sunk costs of market segmentation imply that the option to segment markets is more valuable the greater the variability of the real exchange rate. If a monetary union reduces future real exchange rate variability it could thus stimulate market integration. (C) 2001 Elsevier Science B.V. All rights reserved.