Price Equalization Does Not Imply Free Trade

Piyusha Mutreja, B Ravikumar, Raymond Riezman and Michael Sposi

Review, 2015, vol. 97, issue 4, 323-39

Abstract: In this article, the authors demonstrate the possibility of price equalization in a two-country world with barriers to international trade. For price equalization to occur when the countries are asymmetric, the country with higher productivity must also be the one with the lower trade barrier. A corollary of the authors? result is that small departures from purchasing power parity do not necessarily imply that world trade is mostly integrated.

JEL-codes: F11 F13 F14 (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: Price Equalization Does Not Imply Free Trade (2013)
Working Paper: Price equalization does not imply free trade (2012)
Working Paper: Price equalization does not imply free trade (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlrv:00050

DOI: 10.20955/r.2015.323-39

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