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THE LAW OF ONE PRICE REVISITED: NEW EVIDENCE ON THE BEHAVIOR OF INTERNATIONAL PRICES
Author(s) -
Ceglowski Janet
Publication year - 1994
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1994.tb01339.x
Subject(s) - economics , law of one price , relevance (law) , empirical evidence , price level , macroeconomics , monetary economics , econometrics , mid price , law , philosophy , epistemology , political science
This paper is an empirical investigation of the long‐run behavior of international prices at the microeconomic level. It analyzes the time‐series behavior of a unique set of carefully matched, disaggregated export prices for manufactured goods from the U.S., Gemany, and Japan over the period 1974–90. The results provide little evidence of a long‐run linear relationship between global prices of similar export goods from different sources, casting doubts on the empirical relevance of the law of one price.