Border Effect or Country Effect? Seattle May Not Be so Far from Vancouver After All

• 成果类型: Article
• 署名作者: Gorodnichenko, Yuriy; Tesar, Linda L.
• 署名单位: University of California System; University of California Berkeley; National Bureau of Economic Research; University of Michigan System; University of Michigan
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.1.1.219
• 发表日期: 2009
• 页码: 219-241
• 关键词: trade; canada; COSTS

摘要

This paper reexamines the evidence on the border effect. We argue that if there is cross-country heterogeneity in the distribution of within-country price differentials, there is no clear benchmark from which to gauge the effect of a border. In the absence of a structural model or a (natural) experiment, it is impossible to separate the border effect from the effect of trading with a country with a different distribution of prices. We show that the border effect identified by Engel and Rogers (1996) is entirely driven by the difference in the distribution of prices within the United States and Canada. (JEL F11, F14)