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Understanding Long-run Price Dispersion

Hakan Yilmazkuday and Mario Crucini ()

No 1407, Working Papers from Florida International University, Department of Economics

Abstract: A unique panel of retail prices spanning 123 cities in 79 countries from 1990 to 2005 is used to uncover the novel properties of long-run international price dispersion. At the PPP level, almost all of price dispersion is attributed to unskilled wage dispersion. At the level of individual goods and services, the average contribution of these wages is signi?cantly reduced, ref?ecting that good-specific sources of price dispersion, such as trade costs and good-specifi?c markups, tend to average out across goods. At the LOP level, borders and distance contribute about equally to price dispersion that is rising in the distribution share.

Keywords: Real exchange rates; Purchasing Power Parity; Law of One Price; Dynamic panel (search for similar items in EconPapers)
JEL-codes: D40 E31 F31 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2014-04
New Economics Papers: this item is included in nep-his, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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https://economics.fiu.edu/research/pdfs/2014_working_papers/1407.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: Understanding long-run price dispersion (2014) Downloads
Working Paper: Understanding Long-run Price Dispersion (2013) Downloads
Working Paper: Understanding Long-run Price Dispersion (2013) Downloads
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