Understanding European real exchange rates

• 成果类型: Article
• 署名作者: Crucini, MJ; Telmer, CI; Zachariadis, M
• 署名单位: Vanderbilt University; Carnegie Mellon University; Pompeu Fabra University; University of Cyprus; Louisiana State University System; Louisiana State University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/0002828054201332
• 发表日期: 2005
• 页码: 724-738
• 关键词: purchasing-power parity; one price; border; TRADE; LAW; integration; WORLD; COSTS

摘要

We study good-by-good deviations from the Law-of-One-Price (LOP)for over 1,800 retail goods and services between all European Union (EU) countries for the years 1975, 1980, 1985, and 1990. We find that for each of these years, after we control for differences in income and value-added tax (VAT) rates, there are roughly as many overpriced goods as there are underpriced goods between any two EU countries. We also find that good-by-good measures of cross-sectional price dispersion are negatively related to the tradeability of the good, and positively related to the share of non-traded inputs required to produce the good. We argue that these observations are consistent with a model in which retail goods are produced by combining a traded input with a non-traded input.