Recent panel studies have found relatively high estimates for the elasticity of real exchange rates with respect to productivity measures in transition economies within Balassa- Samuelson frameworks. This contrasts with other findings reporting cross-section price-income elasticity estimates to...

Using a simple product differentiation model with elastic demands, we investigate the relationship between differentiation strategies and vertical relations. Depending on the competitive structure in the upstream market, three differentiation patterns (maximum, minimum and partial...