nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2005‒02‒27
one paper chosen by
Anna Y. Borodina
Perm State University

  1. The Law of one Price in the Russian Economy By Konstantin Gluschenko

  1. By: Konstantin Gluschenko
    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
    JEL: P22 P25 R15 R19

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