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Product price differences across countries : determinants and effects


Lipsey, Robert E.; Swedenborg, Birgitta


Bitte beziehen Sie sich beim Zitieren dieses Dokumentes immer auf folgenden Persistent Identifier (PID):http://nbn-resolving.de/urn:nbn:de:0168-ssoar-256713

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Abstract A substantial part of international differences in prices of individual products, both goods and services, can be explained by differences in per capita income, wage compression, or low wage dispersion among low-wage workers, and exchange rate fluctuations. Higher per capita income is associated with higher prices and higher wage dispersion with lower prices. The effects of higher income and wage dispersion are moderated for the more tradable products. The effects of wage dispersion, on the other hand, are magnified for the more labor-intensive products, particularly low-skill services. The differences in prices across countries are reflected in differences in the composition of consumption. Countries in which prices of labor-intensive services are very high, such as the Nordic countries, consume much less of them. For some services, the shares of GDP consumed in high-price countries are less than 20% of the shares in low-price countries. Since these are services of very low tradability, the low consumption levels of these services imply low employment in them.
Klassifikation Volkswirtschaftstheorie
Freie Schlagwörter International price comparisons; Tradability; Labor intensity; Wage dispersion; Consumption
Sprache Dokument Englisch
Publikationsjahr 2010
Seitenangabe S. 415-435
Zeitschriftentitel Review of World Economics, 146 (2010) 3
DOI http://dx.doi.org/10.1007/s10290-010-0064-8
Status Postprint; begutachtet (peer reviewed)
Lizenz PEER Licence Agreement (applicable only to documents from PEER project)