THE LAW OF ONE PRICE: SURVEY OF A FAILURE
THE LAW OF ONE PRICE: SURVEY OF A FAILURE
Author(s): Alessio Emanuele BiondoSubject(s): Economy
Published by: ASERS Publishing
Keywords: Law of one price; purchasing power parity; relative prices; exchange rate
Summary/Abstract: This paper aims to survey the literature about the Law of One Price in order to document its failure in terms of actual application. After a brief theoretical overview, which starts from classical economists’ thought, the reported literature has been classified on the basis of three main streams: pricing-to-market (also considering investigations about differences between domestic and export prices), national borders, and tradability of goods. Reviewed works have been selected in order to provide a dedicated survey for ‘the Law’, which is absent in previous works about this topic. Therefore, the investigation has been kept intentionally separate from PPP-related debate.
Journal: Theoretical and Practical Research in Economic Fields (TPREF)
- Issue Year: I/2010
- Issue No: 02
- Page Range: 167-181
- Page Count: 15
- Language: English
- Content File-PDF