the economics of a blend mandate for biofuels a biofuel blend mandate may increase or decrease consumer fuel prices with endogenous oil prices depending on relative supply elasticities biofuel tax credits always reduce fuel prices tax credits result in lower fuel prices than under a mandate for the same level of biofuel production if tax credits are implemented alongside mandates then tax credits subsidize fuel consumption instead of biofuels this contradicts energy policy goals by increasing oil dependency co 2 emissions and traffic congestion while providing little benefit to either corn or ethanol producers these social costs will be substantial with tax credits costing taxpayers 28 7 billion annually by 2022 copyright 2008 oxford university press

international trade and 1992 an overview this paper considers the impact of completing the european internal market 1992 in a convenient short hand on the ec s international trade it concentrates on quantifying the positive aspects of the trade in goods particularly with non ec countries it considers the issue in terms of the traditional concepts of customs union theory discusses what does or does not constitute a 1992 effect and briefly surveys some of the few estimates extant

state dependent pricing invoicing currency and exchange rate pass through abstract we analyze exchange rate pass through and volatility of import prices in a dynamic framework where firms are subject to menu costs and decide on price adjustments in response to exchange rate innovations the exchange rate pass through and import price volatility then depend on the invoicing currency in combination with functional forms of cost and demand functions in particular there is lower pass through less frequent price adjustments and lower price volatility when prices are set in the importer s currency than when prices are set in the exporter s currency

demystifying rins a partial equilibrium model of u s biofuels markets abstract we explore four fundamental channels of mandate compliance available under current u s biofuel policy increased ethanol blending through e10 or e85 increased biodiesel blending and a reduction in the overall compliance base simulation results highlight the interplay and varying importance of these channels at increasing blend mandate levels in addition we establish how rin prices are formed the value of a rin in equilibrium is shown to reflect the marginal cost of compensating the blender for employing one additional ethanol equivalent unit of biofuel this contrasts with existing research equating the price of rins to the gap between ethanol supply and demand evaluated at the mandate level we demonstrate the importance of this distinction in case of binding demand side infrastructure constraints such as the ethanol blend wall as percentage blend mandates increase the market for low ethanol blends may contract in order to reduce the overall compliance base this has important implications for implied ethanol demand in the economy

a test of the law of one price in retail banking this paper investigates the level and the determinants of retail banking interest rate differences among spanish banks in the period 1989 2003 we find that the interest rates of twenty five different bank loan and deposit products adjust rather rapidly to their long term values in response to external shocks as the relative version of the law of one price predicts but the evidence runs contrary to the absolute version of the law credit risk premium part of the marginal cost of the loans granted by a particular bank is an important source of interest rate dispersion across banks and loan products both before and after spain joined the euro zone therefore differences in credit risk policies across banks must be taken into account when forming expectations about european retail banking integration

calculating levels of protection is it always appropriate to use world reference prices based on current trading status abstract protection measures such as the nominal protection coefficient npc the effective protection coefficient epc the producer subsidy equivalent pse and the consumer subsidy equivalent cse are conventionally calculated using world reference prices based on current trading status under certain conditions the conventional approach can lead to incorrect estimation of the degree and sometimes even the direction of protection this paper spells out the conditions under which use of world reference prices based on current trading status is incorrect and presents data for wheat in pakistan to illustrate how failure to consider these conditions can lead to misleading policy recommendations

the transfer efficiency and trade effects of direct payments all the different ways governments use to provide financialsupport to farmers can potentially distort trade and reduce net economic welfare however there are some types of support that are less trade distorting and more efficient than others this article reports the results of an analysis that examined different policy measures providing support to crop producers to rank them in terms of their effects on a selection of indicators with a particular focus on trade distortion and income transfer efficiency 1 we begin with an analysis of the differences in policy impacts among the three main categories of support provided to crop producers in oecd countries market price support payments based on land use and payments based on use of purchased inputs oecd 2001c that analysis is based on a two region model of equilibrium in the world market for a representative crop analytical solutions to this modelare devel oped to compare the production trade and income effects of the different support measures following procedures used in cahill and in moro and sckokai comparisons are of impact ratios using market price support as the reference category these ratios measure the effect on production trade or farm income of a given joe dewbre jesus anton and wyatt thompson are economists in the agricultural directorate of the organization for economic cooperation and development where the underlying analysis was undertaken the views expressed are our own and not necessarily those of the oecd secretariat or its member countries we thank our secretariat colleagues ken ash carmel cahill wilfrid legg and michele patterson for helpful comments on an earlier draft and stephane guillot for computer programming assistance this article was presented in a principal paper session at the aaea annualmeeting chicago il august 2001 the articl es in these sessions are not subjected to the journal s standard refereeing process 1

compliance path and impact of ethanol mandates on retail fuel market in the short run past studies have examined the impact of ethanol mandates with a long run perspective and were thus able to assume away short run rigidities and some of the specifics of the biofuel mandates these studies have been of limited use in informing current policy debates because the short to medium run reality is one of strong regulatory and infrastructure rigidities that restrict how ethanol can be consumed in the united states our objectives in this paper are to provide a more coherent framework than currently exists to model and understand how compliance with ethanol mandates in the short run cannot be met with conventional gasoline blends how compliance impacts fuel prices and consumer and producer welfare and also to measure the size of the transfer that occurs between refineries and ethanol producers through the market s renewable identification numbers rins in a model calibrated to 2015 data we find that the effects of increasing ethanol mandates that are physically feasible are close to zero on the retail price of gasoline this result is robust to different gasoline prices supply elasticities and export demand elasticities increased mandates can have a large negative effect on the price of high level ethanol gasoline blends such as e85 if the mandates are increased to approach consumption capacity

estimating markups and market conduct with multidimensional product attributes we demonstrate how to estimate a model of oligopoly pricing when products are multi dimensionally differentiated we provide an empirical counterpart to recent theoretical work on product differentiation using specifications informed by economic theory we estimate price cost margins for products differentiated in many dimensions

the evolution of price dispersion in china s passenger car markets this research identified the rising price dispersion of passenger cars in chinese cities during the period from 2004 to 2006 the sources of the price differentials were then further explored the theoretical and empirical analyses suggest that the income effect as reflected by income differentials across chinese cities and the competition effect as reflected by car supply differentials across chinese cities largely account for regional automobile price differentials across china

the ams in agricultural trade negotiations a review abstract this article reviews the role of the aggregate measure of support ams in the agricultural trade negotiations of the uruguay round contrary to expectations at the start of these negotiations the ams only occupies a subsidiary position in the final agreement in order to explain this first an economic analysis is presented of the producer subsidy equivalent pse the basic ams concept in the gatt discussions secondly the political ams debate is described and analysed using information from unpublished gatt documents although the pse concept is based on simple assumptions its measurement already meets a number of difficult problems policy coverage product coverage external reference prices currency once these are solved the concept may offer a brief insight into actual governmental support in agriculture however the calculations do not provide a sound measure of the trade distortions caused by agricultural policies mainly for that reason the idea of a pure aggregated approach based on the ams proved unsuccessful in the negotiations instead the contracting parties accepted the framework of making binding agreements on three separate areas internal support market access and export support while important and very specific commitments were made in the areas of agricultural imports and exports the ams has only found application in the internal support area

price leadership and discrimination in the european car market this paper explains differences in the price of the same good in different markets in the authors model n producers each play the role of stackelberg leader on their own market and there is one market with no domestic producer the authors show that even without demand differences between markets pretax prices will be higher on markets where there are high cost domestic producers and where taxes are low evidence from the european car market based on time series for individual models supports these results furthermore as the model suggests exchange rate changes are not passed through to car prices copyright 1990 by blackwell publishing ltd

the renewable fuel standard in competitive equilibrium market and welfare effects we construct a tractable multi market equilibrium model designed to evaluate alternative biofuel policies the model integrates the u s agricultural sector with the energy sector and it explicitly considers both u s ethanol and biodiesel production the model provides a structural representation of the renewable fuel standard rfs policies and it uses the arbitrage conditions defining the core value of renewable identification number prices to identify the relevant competitive equilibrium conditions the model is parameterized based on elasticities and technical coefficients from the literature to represent observed 2015 data the model is simulated to analyze alternative scenarios including repeal of the rfs projected 2022 rfs mandates and optimal second best mandates the results confirm that the current rfs program considerably benefits the agriculture sector but also leads to overall welfare gains for the united states mostly via beneficial terms of trade effects implementation of projected 2022 mandates which would require further expansion of biodiesel production would lead to a considerable welfare loss relative to 2015 mandate levels constrained second best optimal mandates would entail more corn based ethanol and less biodiesel than currently mandated

price dispersion over the business cycle evidence from the airline industry this study provides empirical evidence documenting how price dispersion moves with the business cycle in the airline industry performing a fixed effects panel analysis on seventeen years of data covering two business cycles we find that price dispersion is highly pro cyclical this effect is especially pronounced for legacy carriers relative to low cost carriers we show that our empirical result is consistent with firms implementing second degree price discrimination tactics

welfare impacts of alternative biofuel and energy policies an open economy equilibrium model is derived to investigate the effects of energy policy on the u s economy with emphasis on corn based ethanol a second best policy of a fuel tax and ethanol subsidy is found to approximate fairly closely the welfare gains associated with the first best policy of an optimal carbon tax and tariffs on traded goods the largest economic gains to the u s economy from these energy policies arise from their impact on u s terms of trade particularly in the oil market conditional on the current fuel tax an optimal ethanol mandate is superior to an optimal ethanol subsidy copyright 2011 oxford university press

how does a shorter supply chain affect pricing of fresh food evidence from a natural experiment the market for fresh food is often characterized by a large number of intermediaries delivering the product from the farmer to the retailer the existence of these intermediaries especially the informal ones is often claimed to introduce market frictions that push fresh food prices up we test the hypothesis that scaling down these frictions reduces the level of prices our data come from a policy reform in turkey concerning the supply chain regulations in the market for fresh fruits and vegetables starting from january 1st 2012 a new law is enacted i to remove informal intermediaries ii to reduce the farmers cost of access to formal intermediaries such as wholesale market places and iii to provide the farmers with the option to directly sell their products to retailers bypassing the wholesale intermediaries this policy reform resembles a natural experiment that exogenously reduces the supply chain barriers in the market for fresh fruits and vegetables using quasi experimental methods we show that the policy reform has strikingly reduced the prices in the wholesale market we also provide some rough evidence that there is no price effect in the retail market which suggests that part of the wholesale markups may have been transferred to the retailers taken at face value these results provide some hints that consumers have not received any direct benefits from the reform ignoring the general equilibrium effects

price discrimination by u s and german exporters the insensitivity of the u s trade balance to the sharp depreciation of the dollar in the past three years has revived interest in the relationship between exchange rates and the trade balance a central issue in most analyses of the relation between the current account and the exchange rate concerns the price adjustment process the simple integrated competitive market model predicts that local currency prices should change in proportion to the nominal exchange rate for a country too small to influence world prices the relationship between local currency import prices and exchange rates has been referred to as the pass through relationship in the empirical literature in international economics if the proportional relationship between import prices and exchange rates holds pass through is said to be complete accounts of recent u s experience cite the failure of dollar prices of imported goods to rise in proportion to exchange rates i e incomplete pass through as an important factor in explaining the persistence of the trade deficit unfortunately observations on pass through alone provide limited insight into the behavior of markets since incomplete pass through is consistent with at least two fundamentally different paradigms one is the standard competitive model of trade in which the law of one price holds but exchange rate fluctuations are associated with large changes in import demand due to other factors for example if dollar appreciation is correlated with increases in world demand and industry marginal cost is increasing then pass through will be less than complete the other is an imperfectly competitive model in which exporters are capable of price discriminating across destination markets a phenomenon paul krugman 1987 has labeled pricing to market in this model incomplete pass through is typically associated with fluctuations in the markup of price over marginal cost on exports 2 these fluctuations in markups are believed to be countryspecific they do not reflect the behavior of prices to other export destinations both models are plausible explanations of recent u s experience unfortunately it is impossible to distinguish between these competing models using only information on import prices and exchange rates for a single country in order to distinguish between the competing models an empirical analysis of goods prices and exchange rates must be capable of measuring either marginal cost or the markup over marginal cost either of these tasks poses formidable empirical problems much of the empirical literature in industrial organization has been concerned with precisely these issues since markups are an important measure of the competitiveness of industries

high exchange rate volatility and low pass through abstract two specifications of an open economy model are shown to generate high exchange rate volatility and low exchange rate pass through erpt in the model price discrimination causes erpt to be incomplete in both the short and the long run in the short run a small amount of nominal rigidities is enough to reduce erpt sharply still exchange rate depreciation worsens the terms of trade consistent with the evidence possible biases from omitted variables and measurement error in the erpt empirical literature due to data limitations are investigated using model generated time series estimates of erpt coefficients can be quite different from true parameters and are sensitive to the shocks driving the economies estimates can nonetheless detect key structural features of the models

international prices costs and markup differences relative cross border retail prices in a common currency comove closely with the nominal exchange rate using product level prices and wholesale costs from a grocery chain operating in the united states and canada we decompose this variation into relative costs and markup components the high correlation of nominal and real exchange rates is driven mainly by changes in relative costs national borders segment markets retail prices respond to changes in costs in neighboring stores within the same country but not across the border prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries jel f31 l11 l81

testing the market integration process in the european car sector evidence from pricing to market behaviour in this study we investigate the process of the european car market integration by analysing the evolution of cross country differences in the degree of pricing to market behaviour of united kingdom exporters we estimate these country differences by exploiting statistical information for pre tax retail prices and for export unit values conclusions from both independent data sets are in general quite consistent results support the claim that in the period before the block exemption regulation 1400 2002 came fully into force international price discrimination was an important source of car price dispersion within the euro area for a more recent period we found that estimated deviations in pricing to market behaviour across destinations have become lower this convergence suggests that car market integration was progressively improved at the end of the last decade

exchange rates and oligopoly abstract the purpose of this paper is to explain empirical observations concerning the impact of exchange rate changes on industrial prices as exchange rates change the pass through into industrial prices is often incomplete and sometimes it goes into the wrong direction i e the prices in the depreciating country decrease while those in the appreciating country increase the latter is called perverse pass through the usual context for such observations is one of segmented markets and imperfect competition we consider the simplest model with these characteristics two duopolistic firms which both operate in two countries the markets of the two countries are separate and each of the firms produces its good in one of these countries we study the effect of an exchange rate change on the prices in each country and on the level of sales and of profits of each of the firms when strong restrictions such as constant marginal costs are imposed prices move in the right direction in response to an exchange rate change however with general cost and demand structures even in this simple model it is possible for prices in both countries to move in perverse directions

use of the producer subsidy equivalent as a measure of support to agriculture in transition economies measurements of total support or assistance to agriculture using the producer subsidy equivalent pse have become a standard tool of policy analysts in the last decade from its initial use by josling at the food and agriculture organization fao josling fao the pse grew in popularity in parallel with the gatt uruguay round agricultural trade negotiations failure in previous gatt rounds to bring agriculture adequately within gatt rules and disciplines had been attributed in particular to difficulties in capturing the effects of the multiplicity of domestic measures and nontariff barriers to trade in agricultural products grogan pp 297 306 a common yardstick capturing the effects of all these policy measures was needed the organization for economic cooperation and development oecd developed the methodology and applied it progressively to all oecd countries and recently to economies in transition see oecd 1994 1995c and 1995d

measuring the intensity of competition in export markets abstract this paper develops an approach to measuring the intensity of competition in international markets using readily available data on destination specific values and quantities of exports at the seven digit industry level the intensity of competition a group of exporters faces in a particular export market is measured by the residual demand elasticity the group faces this elasticity is identified by exchange rate shocks which rotate the supply relation of the source country export group relative to competitors located in other countries we apply this method to german exports of beer and us exports of linerboard paper the resulting estimates of market power appear to be plausible and consistent with other indicators of competition e g market shares the number of competitors providing support for the applicability of our framework in measuring competition in international markets

markup adjustment and exchange rate fluctuations evidence from panel data on automobile exports abstract this paper uses data on bilateral automobile export prices from the usa germany and japan to gauge the importance of markup adjustment driven by exchange rate movements across several destination markets we find that japanese exports are characterized by a high degree of markup adjustment designed to stabilize the price measured in the buyer s currency there is weak evidence for such behavior on the part of german exporters and no evidence of markup adjustment by us exporters where it exists markup adjustment tends to be highly persistent the dynamic pattern of markup adjustment is consistent with invoicing in the exporter s currency except for exports to the usa and canada

measuring market power in the ready to eat cereal industry the ready to eat cereal industry is characterized by high concentration high price cost margins large advertising to sales ratios and numerous introductions of new products previous researchers have concluded that the ready to eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition this paper empirically examines this conclusion in particular i estimate price cost margins but more importantly i am able empirically to separate these margins into three sources i that which is due to product differentiation ii that which is due to multi product firm pricing and iii that due to potential price collusion the results suggest that given the demand for different brands of cereal the first two effects explain most of the observed price cost margins i conclude that prices in the industry are consistent with noncollusive pricing behavior despite the high price cost margins leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality it is these two factors that lead to high price cost margins

economic integration and market access traditional analysis of the effect of economic integration on the rest of the world draws unambiguously pessimistic conclusions integration causes trade diversion which reduces demand for the rest of the world s exports and reduces supply of its imports the rest of the world s terms of trade may therefore deteriorate with associated welfare loss as is widely recognised this analysis gives an inadequate description of the current phase of european integration study of european integration must incorporate imperfect competition scale economies and intra industry trade the implications of these considerations for the effect of economic integration on the rest of the world have been discussed by corden 1972 robson 1987 pelkmans 1984 and in the context of the effects of 1992 on efta norman 1989 these considerations raise the possibility that consumers in the rest of the world may benefit from integration supply side improvements in the integrating economy for example lower marginal costs if there are increasing returns to scale or the production of more product varieties may spill over into rest of the world markets however the effects of integration on firms in the rest of the world is again negative they suffer reduced market shares and perhaps lower profits this is illustrated in smith and venables 1988 the second way in which current european integration is not adequately described by traditional theory is that the integration process is not the removal of taxes and tariffs but the alteration of rules and regulations the process thus has direct effects not only on ec firms but also on firms from

trade restrictions as facilitating practices abstract the effect of quantitative restrictions in oligopolistic markets is shown to depend on whether imports are substitutes or complements for domestic products in the former case they have profound effects even when set at free trade levels because they impede the ability of the foreign firm to compete in the domestic market thereby acting to facilitate collusion and raise prices and profits for this reason tariffs and quotas are fundamentally non equivalent with substitute goods when goods are complements a voluntary export restriction ver at the free trade level has no effect and tariffs and quotas are equivalent

second best biofuel policies and the welfare effects of quantity mandates and subsidies abstract the quest for biorenewable energy sources is held to justify a number of government interventions including support policies for biofuels such as those responsible for the recent rapid growth of us ethanol production this article provides an analytical assessment of such policies we construct a general equilibrium open economy model that captures the rationale typically invoked to justify government intervention in this setting to alleviate the environmental impact of energy consumption and to decrease us energy dependence on foreign sources the model is used to study both the positive and normative implications of alternative policy instruments including the subsidies and mandates specified by the 2007 energy independence and security act from a positive perspective we find that biofuels mandates are equivalent to a combination of fuel taxes and biofuels subsidies that are revenue neutral from a welfare perspective we show that biofuels mandates dominate biofuels subsidies and that combining fuel taxes with mandates would be welfare enhancing

price transmission and local market power empirical evidence from the austrian gasoline market we analyse the impact of local market power on price margins and different dimensions of price adjustment dynamics speed and asymmetry of price transmission using data for a large number of indiv

the law of one price in scandinavian duty free stores many empirical studies have rejected the law of one price that prices of a good differ across locations has been explained by differences in product attributes and costs of local inputs transport costs trade barriers and that buyers have imperfect information about prices in different locations see penelopi k goldberg and michael m knetter 1997 for a survey we examine the law of one price in situations where none of the mentioned reasons for its failure can be invoked it has also been suggested that deviations from the law of one price are a consequence of rigid nominal prices and that different countries typically have different currencies we explore whether this can contribute to our understanding of deviations from the law of one price our data are taken from three scandinavian duty free outlets where each product at the same location has price tags in at least two currencies hence a consumer has the option to choose between several prices for the same identical good in such a setting there is a strong prior that the law of one price lop hereafter holds well however the potential for arbitrage will arise because nominal prices are not continuously adjusted while exchange rates fluctuate daily based on standard tests we reject lop at all duty free outlets given that lop does not hold here it is less surprising that many previous studies have found that prices of similar products at different locations differ significantly nevertheless the main conclusion of the paper is that in this natural experiment lop remains a useful guide to the behavior of relative prices as deviations become large nominal prices are adjusted to reduce the deviations from lop thereby limiting arbitrage opportunities the patterns at the duty free outlets suggest that there is a band of inaction so that small deviations from lop may persist for almost a decade in one case but that large deviations quickly lead firms to adjust relative prices the findings are consistent with costly arbitrage and fixed costs of adjusting nominal prices

airline code share alliances and their competitive effects abstract code share alliances have become a prominent feature in the competitive landscape of the airline industry however policy makers are extremely hesitant to approve proposed code share alliances when the potential partners route networks have significant overlap the main concern is that an alliance may facilitate price collusion on partners overlapping routes this article shows how policy makers can use a structural econometric framework to quantify the competitive effects of proposed code share alliances where potential alliance partners compete on overlapping routes in the prealliance industry as an example i apply the econometric model to the delta continental northwest alliance this proposed alliance was initially greeted with skepticism by the u s department of transportation owing to the potential partners unprecedented level of route network overlap for the markets considered in my analyses it appears as though the ultimate approval of the alliance by policy makers was justified

how useful is the pse in determining agricultural support the support of the agricultural sector in developed countries plays a major role in the international policy agenda the producer support estimate pse is one of the best known measures which has been developed by oecd and is used all over the globe in the pse all types of support are aggregated and one of the main components 70 at oecd level is the market price support mps here we show by means of characteristic examples that the mps has no clear relation to basic economic measures determining support for producers as a consequence of policy intervention the mps overestimates the consequences of tariffs and export subsidies and underestimates the consequences of quota systems in determining producer support misperception of the size and directions of support may affect policy decision making wrongly the paper indicates that weighted average producer prices corrected for quantity restrictions may be more useful than the reference prices and quantities used by oecd

global biofuels key to the puzzle of grain market behavior these jumps in the prices of these three major grains have also revealed the these jumps in the prices of these three major grains have also revealed the chaotic state of economic analysis of agricultural commodity markets economists chaotic state of economic analysis of agricultural commodity markets economists and scientists have engaged in a blame game apportioning percentages of responand scientists have engaged in a blame game apportioning percentages of responsibility for price spikes to bewildering lists of factors which include a surge in meat sibility for price spikes to bewildering lists of factors which include a surge in meat consumption caused by unprecedented increases of income of the vast populations consumption caused by unprecedented increases of income of the vast populations of china and india idiosyncratic regional droughts and fi res speculative bubbles a of china and india idiosyncratic regional droughts and fi res speculative bubbles a new fi nancialization of grain markets the slowdown of global agricultural research new fi nancialization of grain markets the slowdown of global agricultural research spending jumps in costs of energy and fertilizers shifts in interest rates the decline spending jumps in costs of energy and fertilizers shifts in interest rates the decline of the dollar the surge in biofuels demands bans on genetically modifi ed plants of the dollar the surge in biofuels demands bans on genetically modifi ed plants and climate change several observers have claimed to identify a perfect storm in and climate change several observers have claimed to identify a perfect storm in the grain markets in 2007 2008 a confl uence of some of the factors listed above the grain markets in 2007 2008 a confl uence of some of the factors listed above the continuing confused state of the economics of grain price volatility may the continuing confused state of the economics of grain price volatility may seem odd after all grain markets have many of the features of textbook competiseem odd after all grain markets have many of the features of textbook competitive models the products are relatively uniform their primary producers and tive models the products are relatively uniform their primary producers and ultimate consumers are atomistic price takers prices and outputs in the united ultimate consumers are atomistic price takers prices and outputs in the united states and other developed countries are unusually well measured by the standards states and other developed countries are unusually well measured by the standards of most goods and services in the world economy with data freely available from of most goods and services in the world economy with data freely available from

the effects of domestic merger on exports a case study of the 1998 korean automobile industry abstract this paper examines the economic consequences of a horizontal merger between korean automakers that took place in 1998 with a particular emphasis on export market behavior estimates of structural demand and supply reveal that the merger enhanced production efficiency of the merged party by 3 8 simulations based on these estimates indicate that while the merger increased domestic prices the export volume of the merged party was more than doubled moreover the effects of the merger are found to differ by auto model according to the model s pre merger export status it is shown that efficiency gains from the merger are likely to increase export volumes for models that were already exported prior to the merger and to offset domestic market power for those that were not exported even after the merger finally the paper compares the actual merger s effects to those of alternative counterfactual mergers finding that the actual merger brought greater benefits to producers and fewer to domestic consumers

accounting for development through investment prices abstract cross country income gaps are large in the data can observed investment prices account for these gaps our model adds an extensive margin to the neoclassical growth model by allowing for entry of firms when combined with a returns to variety effect our model provides an amplification mechanism from investment prices to output using cross country data on relative investment prices the model can explain up to 5 to 6 fold income differences between the richest and poorest countries in our sample while simultaneously reducing the implied cross country tfp differences

the evolution of price dispersion in the european car market car prices in europe are characterized by large and persistent differences across countries the purpose of this paper is to document and explain this price dispersion using a panel data set extending from 1980 to 1993 we first demonstrate two main facts concerning car prices in europe i the existence of significant differences in quality adjusted prices across countries with italy and the u k systematically representing the most expensive markets 2 substantial year to year volatility that is to a large extent accounted for by exchange rate fluctuations and the incomplete response of local currency prices to these fluctuations these facts are analysed within the framework of a multiproduct oligopoly model with product differentiation the model identifies three potential sources for the international price differences price elasticities generating differences in markups costs and import quota constraints local currency price stability can be attributed either to the presence of a local component in marginal costs or to markup adjustment that is correlated with exchange rate volatility the latter requires that the perceived elasticity of demand is increasing in price we find that the primary reason for the higher prices in italy is the existence of a strong bias for domestic brancs that generates high markups for the domestic firm fiat in the u k higher prices are mainly attributed to better equipped cars and or differences in the dealer discount practices the import quota constraints are found to have a significant impact on japanese car prices in italy france and the u k with respect to local currency price stability a large percentage of the documented price inertia can be attributed to local costs and a smaller fraction to markup adjustment that is indicative of price discrimination based on these results we conjecture that the emu will substantially reduce the year to year volatility observed in the car price data but without further measures to increase european integration it will not completely eliminate existing cross country price differences

parallel imports demand dispersion and international price discrimination parallel imports goods imported by unauthorized resellers are advocated worldwide for undermining international price discrimination for a continuum of markets we find that uniform pricing by a monopolist yields lower global welfare than third degree discrimination if demand dispersion across markets is large though uniform pricing avoids output misallocation too many markets go unserved mixed systems permitting discrimination across but not within designated groups of markets yield significantly higher welfare than uniform pricing or unrestricted multimarket discrimination and can pareto dominate uniform pricing thus while parallel imports might benefit some countries our results weaken the multilateral case for allowing them

a short history of price level convergence in europe we study the evolution of price level dispersion in europe by combining time series information on harmonized indices of consumer prices hicps with occasional observations of absolute price levels we find that european price levels converged over much of the last 40 to 50 years in the united states our benchmark price level dispersion is more or less stable a back of the envelope calculation suggests that indirect tax rate harmonization convergence of nontraded input costs and convergence of traded input costs in the form of exchange rate stability and increased openness are all important in explaining european price level convergence

outsourcing and pass through a large share of international trade occurs through intra firm transactions we show that this common cross border organization of the firm has implications for the well documented incomplete transmission of shocks across such borders we present new evidence of an inverse relationship between a firm s outsourcing of inputs and its rate of exchange rate pass through we then develop a structural econometric model with final assemblers and upstream parts suppliers to quantify how firms organization of their activities across national borders affects their pass through behavior

empirical evidence on the role of non linear wholesale pricing and vertical restraints on cost pass through abstract how a cost shock is passed through to final consumer prices may relate to nominal price stickiness and rigidities the existence of nonadjustable cost components strategic markup adjustments or other contract terms along the supply distribution chain this paper presents a simple framework to assess the potential role of nonlinear pricing contracts and vertical restraints such as resale price maintenance or wholesale price discrimination in the supply chain in explaining the degree of pass through from upstream cost shocks in the ground coffee category to downstream retail prices we find that resale price maintenance increases pass through rate

exclusive dealing as a barrier to entry evidence from automobiles exclusive dealing contracts between manufacturers and retailers force new entrants to set up their own costly dealer networks to enter the market we ask whether such contracts may act as an entry barrier and provide an empirical analysis of the european car market we first estimate a demand model with product and spatial differentiation and quantify consumers valuations for dealer proximity and dealer exclusivity we then perform policy counterfactuals to assess the profit incentives and possible entry deterring effects of exclusive dealing we find that there are no unilateral incentives to maintain exclusive dealing but there is a collective incentive for the industry as a whole furthermore a ban on exclusive dealing would raise the smaller entrants market share but more importantly consumers would gain not so much because of increased price competition but rather because of the increased spatial availability which compensates for the demand inefficiency from a loss of dealer exclusivity

collusion or competition interfirm relationships in the chinese auto industry the chinese passenger vehicle industry contains a large number of manufacturers some of them are members of big corporate groups centered around state owned enterprises these corporate relationships may facilitate collusion this paper applies the non nested hypothesis test methodology to data on passenger vehicles to identify whether price collusion exists within corporate groups or across groups our empirical results support the assumption of bertrand nash competition in the chinese passenger vehicle industry we find no evidence for within or cross group price collusion our policy experiments show that indigenous brands will gain market shares and profits if within group companies merge

the demand for ethanol as a gasoline substitute abstract this paper estimates household preferences for ethanol e85 as a gasoline e10 substitute i develop a theoretical model linking the shape of the ethanol demand curve to the underlying distribution among households of willingness to pay for ethanol i estimate the model using instrumental variables techniques and data from many retail fueling stations i find that a 0 10 per gallon increase in ethanol s price relative to gasoline leads to a 12 16 decrease in the quantity of ethanol demanded my findings imply that preferences for ethanol are heterogeneous and that a substantial fraction of households are willing to pay a premium for the fuel this reduces substantially the simulated efficiency cost of an ethanol content standard since some households choose ethanol without large subsidies mitigating deadweight losses

cross country price dispersion in the euro era a case study of the european car market impact of the euro this paper investigates the effects of the european monetary union on cross country price differences in the european car market the analysis utilizes disaggregate bi annual data on the prices of almost all car models sold in the 15 countries of the european union over 1993 2003 the data refer to identical models with identical specifications and options to identify the euro s effect we exploit the fact that out of the 15 countries in our sample 12 joined euroland at the beginning of 1999 and officially adopted the euro as their national currency at the beginning of 2002 while 3 countries remained outside the monetary union we investigate whether there is a systematic difference in the evolution of cross country price dispersion between euroland members and non members after 1999 our analysis distinguishes between phase i monetary union with national currencies preserved 1999 2001 and phase ii official adoption of the euro as a national currency in 2002 we examine the evolution of both the absolute price differentials across countries and the speed with which deviations from the long term cross country differentials are eliminated we find that in the pre euro era countries that later joined euroland exhibited lower price differentials relative to the base country of the netherlands by approximately 6 the monetary union further reduced these differentials by a small but significant percentage about 1 5 between 1999 and 2001 this reduction happened while the price differentials in non euroland countries increased the price differentials in euroland countries further decreased following the official euro adoption in 2002 however we cannot attribute this decline to the euro as we witness an even faster decrease of price differentials in non euroland countries over the 2002 2003 period despite these reductions cross country price differences remain large even among members regarding the speed of convergence we find that even before 1999 the half life of price shocks was shorter in euroland countries compared to non euroland countries 0 65 versus 1 year however we do not find any evidence that the emu further affected the speed of convergence in a significant manner overall our results suggest a big role for exchange rate stability in reducing international price dispersion and a smaller role for a common currency the surprisingly high remaining international price differentials after the euro suggest the need for additional measures towards integration e g liberalization of the distribution system reduction of high registration taxes in particular countries pinelopi koujianou goldberg and frank verboven

quality based price discrimination and tax incidence the market for gasoline and diesel cars in europe the existing tax policies toward gasoline and diesel cars in european countries provide a unique opportunity to analyze quality based price discrimination and the implied tax incidence in my econometric framework consumers choose the type of engine based on their annual mileage prices are set by the manufacturers the relative pricing of gasoline and diesel cars appears to be consistent with monopolistic price discrimination effectively segmenting low mileage from high mileage consumers on average about 75 to 90 of the price differentials between gasoline and diesel cars can be explained by markup differences i draw implications for the effectiveness and the revenue effects of tax policy

competitive pressure and the adoption of complementary innovations liberalization of the european automobile distribution system in 2002 limits the ability of manufacturers to impose vertical restraints leading to a substantial increase in competitive pressure among dealers we estimate an equilibrium model of profit maximization to evaluate how dealers change their innovation adoption strategies following the elimination of exclusive territories using french data we evaluate the existence of complementarities between the adoption of software applications and the scale of production firms view these innovations as substitutes and concentrate their effort in one type of software as they expand their scale of production results are robust to the existence of unobserved heterogeneity

price discrimination with differentiated products definition and identification i introduction price discrimination is said to exist when the same product is sold to different consumers at different prices most economists also agree that price discrimination is at work when similar but not identical products are sold at prices that do not reflect differences in costs economics textbooks are rife with examples such as student or senior citizen discounts hardcover and paperback versions of books dinner versus lunch prices at restaurants airfares with various restrictions and price spreads of retail gasoline products on the other hand some economists have criticized the identification of such apparent price anomalies as price discrimination for example lott and roberts 1991 argue that there are usually cost based explanations for these phenomena and propose such explanations for the cases of airfare gasoline and restaurant prices nevertheless the authors do not challenge the conventional wisdom that price differences that cannot be explained by cost differences are discriminatory in recent years a number of papers have set out to empirically assess instances of alleged price discrimination the literature goes to great lengths to control for potential sources of cost variation among different products and thus to the extent that it is successful is not subject to the lott roberts critique almost all studies conclude that price discrimination is practiced in the particular market they analyze a skeptic of course could always argue that some sources of cost variation have not been accounted for and thus dismiss the results as erroneous despite the mild controversy over the methodology and its effectiveness the basic premise seems universally accepted the existence of price variation that cannot be explained by cost differences constitutes price discrimination this is not however a formal definition in fact there is no single widely accepted definition of price discrimination when products are not homogeneous some authors define price discrimination to exist when price cost margins absolute differences between differentiated products are unequal whereas others prefer to compare price cost markups percentage differences few authors have discussed the relative merits of one measure over the other 1 the relationship between the two has never been spelled out and the choice among them remains arbitrary in this article i aim to shed some light on this issue and provide some guidelines to empirical researchers interested in price discrimination i start by providing an overview of the current state of the literature in section ii i introduce the two competing definitions of price discrimination and briefly discuss the justification that has been provided for each i then review the empirical literature that uses one or the other definition as the basis of testing for price discrimination i present the basic methodology and discuss the definitional choices made by researchers investigating different market environments the picture that emerges from this overview is murky and provides little guidance to the empirical practitioner the absence of controversy on the choice of definition might simply reflect the fact that the two commonly used definitions are equivalent in section iii i show that this is not the case specifically it is possible for one definition to indicate the presence of price discrimination and for the other one to reject it it is also possible for the two measures to take opposite signs that is one product may have a higher markup and a lower margin than the other i also show that in general the margin criterion is more likely to indicate the presence of price discrimination i conclude that the choice of definition has important implications and should be given careful consideration the challenge is to come up with a consistent way of thinking about price discrimination that can easily be applied in a variety of settings

exchange rate pass through when market share matters the authors investigate the pass through from exchange rates to import prices when firms future demands depend on their current market shares they show that profit maximizing foreign firms may either raise or lower their dollar export prices when the dollar appreciates temporarily i e the pass through may be perverse and that current import prices may be more sensitive to expected future exchange rates than to current exchange rates they present evidence that suggests the behavior of expected future exchange rates may provide a clue to the puzzling recent behavior of u s import prices copyright 1989 by american economic association

convergence in car prices among european countries this article contributes to the literature on price convergence in europe by investigating the existence of stochastic and deterministic convergence of car prices in the eu15 countries we apply recently developed econometric techniques that allow for multiple structural breaks to an up to date dataset we find considerable evidence of both types of convergence in our sample of countries and car models therefore suggesting a tendency for relative prices to equalize over time in addition we find evidence regarding the importance in this convergence process of both legislative changes taking place in the years 1996 and 2002 and the implementation of economic and monetary union emu

goods prices and exchange rates what have we learned import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country recent research indicates that common currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets this evidence suggests that incomplete pass through is a consequence of third degree price discrimination while distance matters for market segmentation borders have independent effects the source of the border effect has not been clearly identified furthermore there is little evidence yet to suggest substantial market power is implied by the observed price discrimination

price setting in online markets basic facts international comparisons and cross border integration we document basic facts about prices in online markets in the united states and canada which is a rapidly growing segment of the retail sector relative to prices in regular stores prices in online markets are more flexible and exhibit stronger pass through 60 75 percent and faster convergence half life less than two months in response to movements of the nominal exchange rate multiple margins of adjustment are active in the process of responding to nominal exchange rate shocks properties of goods sellers and markets are systematically related to pass through and the speed of price adjustment for international price differentials

pricing to market price discrimination or product differentiation we employ a vertical differentiation model to examine the potential bias in pricing to market results when using export unit values aggregating differentiated products our results show that i false evidence of pricing to market is always found when using unit values whether the law of one price holds or not and ii the size of the bias increases with the level of product differentiation our simulation results support those conceptual findings thus some of the positive pricing to market results in the literature could be an artifact of the product heterogeneity embodied in unit values rather than evidence of imperfect competition

the welfare economics of a biofuel tax credit and the interaction effects with price contingent farm subsidies a framework is developed to analyze the effects of a biofuel consumer tax exemption and the interaction effects with a price contingent farm subsidy ethanol prices rise above the gasoline price by the amount of the tax credit corn farmers gain directly while gasoline consumers only gain from any reduction in world oil prices due to the extra ethanol production domestic oil producers lose historically the intercept of the ethanol supply curve is above the gasoline price hence part of the tax credit is redundant and represents rectangular deadweight costs that dwarf triangular deadweight cost measures of traditional farm subsidies copyright 2007 oxford university press

the demand for e85 geographical location and retail capacity constraints abstract consumption of high ethanol gasoline blends must increase if united states renewable biofuel mandates are to rise above current levels as envisioned by the renewable fuel standard one such blend is e85 which contains no more than 85 ethanol and no less than 15 gasoline we derive the demand for e85 based on a model of motorists preferences for motor fuel blends and calibrate the demand for e85 using data on the location of flex vehicles and fuel stations that sell e85 in the united states we also show how limits on the capacity of fuel stations to sell e85 affect demand and explore the potential future demand for e85 by increasing the number of fuel stations offering e85 and the number of flex vehicles we show that the existing fleet of flex vehicles is sufficient to accommodate more than 15 billion gallons of ethanol without a large price discount on e85 only if the number of stations that sell e85 increases substantially provided with fast enough installation of new e85 pumps this level of consumption would be sufficient to meet the mandates envisioned for conventional ethanol by 2015

liberalizing a distribution system the european car market we quantify the competitive effects of liberalizing the selective and exclusive distribution system in the european car market based on a model of oligopoly pricing with differentiated products we consider two possible competitive effects from liberalization i the creation of international intrabrand competition cross border trade which will result in a reduction of international price discrimination and ii a possible cumulative effect arising from a strengthening of national intrabrand competition which would result in reduced double marginalization we find that the reduction in international price discrimination mainly redistributes consumer gains across countries it has a positive but modest effect on total welfare if liberalization also has the cumulative effect of reducing double marginalization the welfare effects are much higher finally we find that the effects of liberalization on the manufacturers profits are either small or positive this finding implies that international price discrimination and softening competition through a double marginalization mechanism should not be interpreted as main profit motives for the previous distribution system but only as unintended side effects hence the industry rationale for maintaining the previous distribution system should be sought in other areas jel f15 l42

first degree price discrimination goes to school personalized pricing is widely discussed but seldom observed making studies of its efficacy rare yet first degree price discrimination is common in the pricing of higher education and i use data on prices and the characteristics of students admitted to a professional graduate program at a public university to estimate a matriculation demand function i then derive linear pricing functions that maximize revenue for a target number of students by allowing these functions to depend on progressively richer sets of observables i explore the effect of personalization of pricing on profit tailoring prices to a one dimensional measure of student quality would raise revenue by 2 2 per cent above the revenue with uniform pricing pricing based on both student quality and state residency raises revenue by 8 4 per cent and further tailoring based on available observables raises prices 9 0 per cent above the maximum revenue under uniform pricing pricing that obeys current statutory tuition limits raises revenue less but still by just over half as much i also infer the welfare weights that the pricing process implicitly attaches to student characteristics

lechatelier samuelson principle in games and pass through of shocks abstract the lechatelier samuelson principle states that as a reaction to a shock an agent s short run adjustment of an affected action is smaller than its long run adjustment when the agent can also adjust other related actions we extend the principle to strategic environments where the long run adjustment also accounts for other players adjusting their strategies we show that the principle holds for supermodular games strategic complements satisfying monotone comparative statics and provide sufficient conditions for the principle to hold in games of strategic substitutes heterogeneity we discuss the principle s implications for cost pass through of multiproduct firms

tax incidence with strategic firms in the soft drink market abstract because soft drink sd consumption is considered to be a contributor to the epidemic of obesity there is a growing interest in evaluating the impact on sd consumption of alternative tax policies in this paper we propose a methodology to evaluate the impact of taxation of a food market taking into account the strategic price response of both manufacturers and retailers we apply this methodology to the french sd market and simulate the impacts of ad valorem and excise taxes we find that firms behave differently when facing an ad valorem tax or an excise tax an excise tax is overshifted to consumer prices while an ad valorem tax is undershifted to consumer prices we find that an excise tax based on the sugar content of sd is the most effective at reducing sd consumption our results also indicate that ignoring strategic pricing by firms leads to misestimations of the impact of taxation by between 15 and 40 depending on the products and the tax implemented in the short term that is ignoring positive long term health effects a 9 cents l excise tax has a small negative welfare effect about 1 person year

market power and heterogeneous pass through in german electricity retail abstract we analyze the pass through of cost changes to retail tariffs in the german electricity market over the 2007 2014 period we find an average pass through rate of around 60 this significantly varies with demand factors while the pass through rate to baseline tariffs where firms have greater market power because customers are less willing to switch is only 50 it increases to 70 in the competitive segment of the market although the pass through rate of independent firms is significantly higher than that of other firms in the competitive market segment the extent of supply side heterogeneity is limited thus the firms ability to exercise market power and reduce pass through appears to be constrained by competition and largely determined by demand side factors finally we find that the pass through rate in the competitive market segment has been approaching unity over the past years indicating a rise in competitive pressure

a structural approach to explaining incomplete exchange rate pass through and pricing to market the continuing depreciation of the dollar against other major currencies coupled with concerns about the impact of china s exchangerate policy on domestic prices has spurred new interest in the exchange rate pass through literature a recent study by economists at the federal reserve board of governors see mario marazzi et al 2005 attracted wide attention by documenting a steady decline over the past decade in the pass through of exchange rates into us import prices this finding was later challenged by a study published by the federal reserve bank of new york hellerstein deirdre daly and christina marsh 2006 which demonstrated that the finding of such a decline depends crucially on the specification of the pass through regression and in particular the inclusion of commodity prices this exchange highlights the need to understand the structural determinants of exchange rate pass through not only because such understanding is important when trying to forecast future pass through patterns but also because it provides guidance regarding the specification of the appropriate reduced form regression and more generally measurement of pass through the increased availability of micro data on prices and quantities means that research uncovering these determinants is more promising than sources of international price stickiness

an empirical investigation of the welfare effects of banning wholesale price discrimination rand 054 rand2007 cls 1994 07 13 v1 2u standard latex document class rand rand 054 dispatch 12 7 2008 ce n a journal msp no no of pages 26 pe sharon rand journal of economics vol 40 no 1 spring 2009 pp 20 45 an empirical investigation of the welfare effects of banning wholesale price discrimination sofia berto villas boas economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination if downstream cost differences exist then discrimination shifts production inefficiently toward high cost retailers so a ban increases welfare if differences in price elasticity of demand across retailers exist discrimination may increase welfare if quantity sold increases so a ban reduces welfare using retail prices and quantities of coffee brands sold by german retailers i estimate a model of demand and supply and separate cost and demand differences simulating a ban on wholesale price discrimination has positive welfare effects in this market and less if downstream cost differences shrink or with less competition introduction wholesale price discrimination means that an upstream firm sets different prices for the same product for various downstream retailers wholesale price discrimination is commonly practiced in many markets examples include markets such as petroleum distribution steel heavy trucking tobacco and pharmaceuticals in several countries milk and other dairy products are sold using government administered or sanctioned discriminatory pricing schemes wholesale price discrimination practices are also used for services such as loans insurance and advertising 1 competition authorities have been concerned with wholesale price discrimination the european union treaty s article 82 c prohibits practices where a dominant firm would place trading partners at a competitive disadvantage the u s robinson patman act forbids discriminat ing in price between different purchasers where the effect may be to lessen competition unless the university of california berkeley sberto are berkeley edu i thank the editor igal hendel and two anonymous referees for many helpful comments and max auffhammer cyndi berck peter berck gal hochman silke januszewski forbes george judge kai uwe k uhn diana lazo mark muendler aviv nevo ariel pakes jeff perloff andrew sweeting miguel villas boas and participants at uc san diego university of michigan the inra idei conference in toulouse and the university of british columbia summer conference in industrial organization for their suggestions i thank daniel klapper for letting me have access to the data support from the giannini foundation and from an aes grant are gratefully appreciated see for gasoline markets texaco v hasbrouck 496 us 543 no 87 2048 1990 and the new york state motor fuel marketing practices act for steel chan hall and rust 2003 for heavy trucking volvo trucks north america inc v reeder simco gmc inc docket no 04 905 for tobacco brooke group ltd v brown and williamson tobacco corp 509 us 209 no 92 466 1993 for wholesale pharmaceuticals see http www datcp state wi us trade business unfair comp drug price jsp for dairy markets see for example gardner 1984 and for services see givens 1983 c 2009 rand copyright

is there really a border effect the observed excess price variability in cross border city pairs compared to that in within country city pairs has been defined as the border effect we used a unique data set from cities that were in the same country at one time and were in two separate countries later on to examine the effects of the presence of a national border on price variability interestingly a border like effect was detected even during the period when all the cities were in the same country we also found a large border effect when cities were in two separate countries however we found no change in the price variability at cross border city pairs during the periods both before and after the cities separated into two different countries this finding suggests that the observed systematic higher variability of consumer prices in cross border city pairs might not be due to the presence of a border as suggested in the literature

the market impact and the cost of environmental policy evidence from the swedish green car rebate we quantify the effects of the swedish gcr a program to reduce oil dependence and greenhouse gas emissions in the automobile industry we find the gcr to increase the market shares of green cars and its cost to be 109 tonco2 saved thus 5 times the price of an emission permit since the main green cars in sweden are ffvs flexible fuel vehicles which can switch between petrol gasoline and ethanol we also account for fuel choice which increases the cost of the program finally we show that consumers would have purchased ffvs regardless of the rebate provided by the gcr

a structural approach to identifying the sources of local currency price stability the inertia of the local currency prices of traded goods in the face of exchange rate changes is a well documented phenomenon in international economics this paper develops a structural model to identify the sources of this local currency price stability and applies it to micro data from the beer market the empirical procedure exploits manufacturers and retailers first order conditions in conjunction with detailed information on the frequency of price adjustments following exchange rate changes to quantify the relative importance of local non traded cost components markup adjustment by manufacturers and retailers and nominal price rigidities in the incomplete transmission of such changes to prices we find that on average approximately 60 of the incomplete exchange rate pass through is due to local non traded costs 8 to markup adjustment 30 to the existence of own brand price adjustment costs and 1 to the indirect strategic effect of such costs though these results vary considerably across individual brands according to their market shares

policy shocks and market based regulations evidence from the renewable fuel standard the renewable fuel standard mandates large increases in u s biofuel consumption and is implemented using tradable compliance credits known as rins in early 2013 rin prices soared causing the regulator to propose reducing future mandates we estimate empirically the effect of three policy shocks that reduced the expected mandates in 2013 we find that the largest of these shocks decreased the value of the fuel industry s 2013 compliance obligation by 7 billion we then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel we argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the rfs and discuss alternative policy designs to address the problems that arose in 2013

do capital importing countries pay higher prices for their imports of goods abstract we examine the effects that a country s net capital flows have on the border prices that a country pays for its imports of goods using data from 2000 to 2009 for 11 euro area countries we utilize a pricing to market specification to study exporters pricing behavior to the rest of the countries in the sample at the industry level for 900 goods disseminated at the 4 digit standard international trade classification level this allows us to construct a panel dataset which contains observations across exporters importers industries and time we find a strong positive influence of the importing country s net capital inflows on the border prices of its imports of goods this result is robust across different specifications of the underlying model as well to different sample dis aggregations across types of capital flows product categories and exporters

intertemporal substitution and new car purchases this article presents a dynamic demand model for motor vehicles this approach accounts for the change in the mix of consumers over the model year and measures consumers substitution patterns across products and time i find intertemporal substitution is significant consumers are more likely to change the timing of their purchase in reaction to a price increase rather than buy another vehicle in the same period further i find automakers use of large cash back rebates at the end of the model year although boosting overall sales induces large numbers of consumers to delay their purchases and so pay lower prices

international comparisons of pricing to market behavior this paper measures the degree of price discrimination across export destinations that is associated with exchange rate changes using u s u k german and japanese industry level data given the industries sampled more price discrimination across destinations is observed in the u k german and japanese data for industries that match across source countries however behavior is very similar across source countries furthermore destination specific price adjustment on exports to the united states from germany and japan is similar to price adjustment observed on shipments to other destinations most variation in the data appears to be related to industry copyright 1993 by american economic association