Transport Cost, Relative Price, and International Risk Sharing
- Authors
- Lee, Inkoo
- Issue Date
- May-2011
- Publisher
- KOREA TRADE RESEARCH ASSOC
- Keywords
- Transport cost; relative price; risk sharing; home bias
- Citation
- JOURNAL OF KOREA TRADE, v.15, no.2, pp.43 - 54
- Journal Title
- JOURNAL OF KOREA TRADE
- Volume
- 15
- Number
- 2
- Start Page
- 43
- End Page
- 54
- URI
- http://scholarworks.bwise.kr/ssu/handle/2018.sw.ssu/13669
- ISSN
- 1229-828X
- Abstract
- This paper examines the role Of transport cost in accounting for the puzzling behaviors of relative price and risk sharing across countries. We show that introducing transport cost to an otherwise standard competitive model improves its ability to rationalize deviations from the law of one price and imp effect international risk sharing. Our analysis suggests that the purchasing power parity and international consumption correlation puzzles can naturally arise in the presence of real frictions, even under the assumption of complete financial markets.
- Files in This Item
- There are no files associated with this item.
- Appears in
Collections - College of Economics and International Commerce > Department of Global Commerce > 1. Journal Articles
![qrcode](https://api.qrserver.com/v1/create-qr-code/?size=55x55&data=https://scholarworks.bwise.kr/ssu/handle/2018.sw.ssu/13669)
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.