Domestic Market Integration and the Law of One Price in Brazil

WPIEE2015213 Image
Price:  $0.00

Author/Editor: Carlos Góes, Troy Matheson
Release Date: © September, 2015
ISBN : 978-1-51359-236-7
Stock #: WPIEE2015213
English

Languages and formats available

EnglishFrenchSpanishArabicRussianChinesePortuguese
PaperbackYes
PDFYes
ePubYes
MobipocketYes

Description

This paper presents the first assessment domestic market integration in Brazil using the law of one price. The law of one price is tested using two panel unit root methodologies and a unique data set comprising price indices for 51 products across 11 metro-areas. We find that the law of one price holds for most tradable products and, not surprisingly, non-tradable products are found to be less likely to satisfy the law of one price. While these findings are consistent with evidence found for other countries, price convergence occurs very slowly in Brazil, suggesting relatively limited domestic market integration.




More publications in this series: Working Papers


More publications by: Carlos Góes ; Troy Matheson