| 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. |