Borraz, Fernando; Cavallo, Alberto; Rigobon, Roberto; … - Departamento de Economía, Facultad de Ciencias Sociales - 2012
The “border effect” literature ?nds that political boundaries have a large impact on relative prices, implicitly adding several thousands of miles to trade. In this paper we show that the standard empirical speci?cation suffers from selection bias, and propose a new methodology based on...