International Prices, Costs, and Markup Differences
Relative cross-border retail prices, in a common currency, comove closely with the nominal exchange rate. Using product-level prices and wholesale costs from a grocery chain operating in the United States and Canada, we decompose this variation into relative costs and markup components. The high cor...
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| Veröffentlicht in: | The American economic review 2011-10, Vol.101 (6), p.2450-2486 |
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| container_end_page | 2486 |
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| container_issue | 6 |
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| container_title | The American economic review |
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| creator | Gopinath, Gita Gourinchas, Pierre-Olivier Hsieh, Chang-Tai Li, Nicholas |
| description | Relative cross-border retail prices, in a common currency, comove closely with the nominal exchange rate. Using product-level prices and wholesale costs from a grocery chain operating in the United States and Canada, we decompose this variation into relative costs and markup components. The high correlation of nominal and real exchange rates is driven mainly by changes in relative costs. National borders segment markets. Retail prices respond to changes in costs in neighboring stores within the same country but not across the border. Prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries. |
| doi_str_mv | 10.1257/aer.101.6.2450 |
| format | Article |
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Using product-level prices and wholesale costs from a grocery chain operating in the United States and Canada, we decompose this variation into relative costs and markup components. The high correlation of nominal and real exchange rates is driven mainly by changes in relative costs. National borders segment markets. Retail prices respond to changes in costs in neighboring stores within the same country but not across the border. Prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries.</abstract><cop>Nashville</cop><pub>American Economic Association</pub><doi>10.1257/aer.101.6.2450</doi><tpages>37</tpages><oa>free_for_read</oa></addata></record> |
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| source | Jstor Complete Legacy; Business Source Complete; American Economic Association Web |
| subjects | Boundaries Canada Capital costs Cost analysis Cost estimates Costs Cross-national analysis Domestic markets Economic theory Economics Exchange rates Foreign exchange rates Grocery chain Grocery stores International borders Marginal costs Market prices Market segmentation Markup differences Markups Mineral water Prices Retail prices Retail stores Retail trade Statistical median Studies Transaction costs U.S.A Wholesale trade |
| title | International Prices, Costs, and Markup Differences |
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