The paper investigates the law of one price (LOP), using 84 Canada/U.S. manufacturing prices over 1961–1996.We find that while there is a long-run relationship between Canadian and U.S. prices, industries vary in terms of adherence to the LOP. In industries with higher degree of market...

This paper uses a detailed industry-level data base of industry prices in the manufacturing sector in Canada and the United States to investigate whether prices are co-integrated in the two countries and whether the relationship between the two sets of prices follows the law of one price. We...

The paper examines the possible explanations for deviations from purchasing power parity (PPP) between Canada and the United States in the 1980s and 1990s and investigates both the productivity effect and the underlying PPP assumption for tradable goods.