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The Law of One Price Without the Border : The Role of Distance Versus Sticky Prices

Crucini, Mario J. - 2009

We examine the role of nominal price rigidities in explaining the deviations from the Law of One Price (LOP) across cities in Japan. Focusing on intra-national relative prices isolates the border effect and thus enables us to extract the pure effect of sticky prices. A two-city model with...

Persistent link: https://www.econbiz.de/10012463812

The Internationalization of Production

Lipsey, Robert E. - 1989

The degree of internationalizaton of the enterprise or business sectors of many countries, as measured by the ratio of direct investment abroad to domestic wealth or assets, or of assets or employment abroad to that at home, has been growing over the last twenty years or more. The exception to...

Persistent link: https://www.econbiz.de/10012476130

Time as a Trade Barrier

Hummels, David - 2012

A large and growing share of international trade is carried on airplanes. Air cargo is many times more expensive than maritime transport but arrives in destination markets much faster. We model firms' choice between exporting goods using fast but expensive air cargo and slow but cheap ocean...

Persistent link: https://www.econbiz.de/10012460901

Did the Death of Distance Hurt Detroit and Help New York?

Glaeser, Edward L. - 2007

Urban proximity can reduce the costs of shipping goods and speed the flow of ideas. Improvements in communication technology might erode these advantages and allow people and firms to decentralize. However, improvements in transportation and communication technology can also increase the returns...

Persistent link: https://www.econbiz.de/10012464936

How Far Goods Travel : Global Transport and Supply Chains from 1965-2020

Ganapati, Sharat; Wong, Woan Foong - National Bureau of Economic Research - 2023

This paper considers the evolution of global transportation usage over the past half century and its implications for supply chains. Transportation usage per unit of real output has more than doubled as costs decreased by a third. Participation of emerging economies in world trade and...

Persistent link: https://www.econbiz.de/10014250184

The Spatial Diffusion of Technology

Comin, Diego A. - 2012

also when measuring distance along the south-north dimension. A simple theory of human interactions can account for these … empirical findings. The theory suggests that the effect of distance should vanish over time, a hypothesis that we confirm in the …

Persistent link: https://www.econbiz.de/10012460126

Sources of Entropy in Representative Agent Models

Backus, David - 2011

preferences, habits, and jumps. The metrics describe the pricing kernel's dispersion (the entropy of the title) and dynamics (time … dependence, a measure of how entropy varies over different time horizons). We show how each model generates entropy and time … approximations -- clarifies the mechanisms underlying these models. It also reveals, in some cases, tension between entropy, which …

Persistent link: https://www.econbiz.de/10012461438

Rationally Inattentive Behavior : Characterizing and Generalizing Shannon Entropy

Caplin, Andrew - 2017

We provide a full behavioral characterization of the standard Shannon model of rational inattention. The key axiom is "Invariance under Compression", which identifies this model as capturing an ideal form of attention-constrained choice. We introduce tractable generalizations that allow for many...

Persistent link: https://www.econbiz.de/10012455030

Sprawl and Urban Growth

Glaeser, Edward L. - 2003

Cities can be thought of as the absence of physical space between people and firms. As such, they exist to eliminate transportation costs for goods, people and ideas and transportation technologies dictate urban form. In the 21st century, the dominant form of city living is based on the...

Persistent link: https://www.econbiz.de/10012468965

Distance, Skill Deepening and Development : Will Peripheral Countries Ever Get Rich?

Redding, Stephen - 2003

This paper models the relationship between countries' distance from global economic activity, endogenous investments in education, and economic development. Firms in remote locations pay greater trade costs on both exports and intermediate imports, reducing the amount of value added left to...

Persistent link: https://www.econbiz.de/10012469256