The empirical analysis on price dispersion, as described by [Engel, C., Rogers, J.H., 1996. How wide is the Border? American Economic Review 86, 1112-1125], is to investigate the determinants of international relative price fluctuations. Using data from the Japanese gasoline industry, we...

The impact of shocks in dynamic environments depends on how forward-looking agents anticipate the path of future fundamentals that shape their decisions. We incorporate flexible beliefs about future fundamentals in a general class of dynamic spatial models, allowing beliefs to be evolving,...