The Law of one Price in the Russian Economy

Konstantin Gluschenko ()

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, K.U.Leuven

Abstract: Taking the law of one price as a test for market integration, the spatial set-up of Russia’s market integration over 1994-2000 is analyzed with the use of time series of the cost of a staples basket across Russian regions. The law is found to hold for about 50% to 60% of Russian regions, estimates of a threshold model suggesting rather high barriers to inter-regional trade. To reveal whether there is a movement towards market integration among non-integrated regions, dynamics of cross-sectional distribution of prices receives study. The results indicate that such a tendency does take place. An effort is made to identify forces responsible for Enter-regional price disparities.

Keywords: market integration; price dispersion; price convergence; Russia; Russian regions (search for similar items in EconPapers)
JEL-codes: P22 P25 R15 R19 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis, nep-geo, nep-ifn and nep-tra
Date: 2004
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Persistent link: http://EconPapers.repec.org/RePEc:lic:licosd:15204

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