Estimating the border effect : Some new evidence

  title={Estimating the border effect : Some new evidence},
  author={Gita Gopinath and Pierre-Olivier Gourinchas},
To what extent do national borders and national currencies impose costs that segment markets across countries? To answer this question the authors use a dataset with product-level retail prices and wholesale costs for a large grocery chain with stores in the United States and Canada. They develop a model of pricing by location and employ a regression discontinuity approach to estimate and interpret the border effect. They report three main facts: One, the median absolute retail price and… CONTINUE READING


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