Why are nontraded goods cheaper in poor countries?
نویسندگان
چکیده
منابع مشابه
Why Are Poor Countries Poor ?
We attempt to explain why standard explanations of the poverty of nations are unsatisfactory. We first argue that human capital is low in poor countries because its production has increasing returns with respect to life expectancy. We then show that the reason why capital does not flow to poor countries (the Lucas paradox) can readily be explained once market prices rather than PPP prices are u...
متن کاملWhy Are Ethnically Divided Countries Poor?
This paper presents a dynamic game with capital accumulation of war between ethnic groups. Ethnically divided countries are more prone to fighting wars and the threat of war reduces income. Ethnic divisions lead to pressure for the government to redistribute resources from some ethnic groups to other groups. Groups fight each other to control redistribution policy. The model can account for 70 ...
متن کاملWhy are Goods and Services more Expensive in Rich Countries?
Empirical studies show that tradable consumption goods are more expensive in rich countries. This paper proposes a simple yet novel explanation for this apparent failure of the law of one price: Consumers’ utility from tradable goods depends on their consumption of complementary goods and services. Monopolistically competitive firms charge higher prices in countries with more complementary good...
متن کاملNontraded goods , nontraded factors , and international non - diversification
Can the presence of nontraded consumption goods or nontraded factors of production explain the high degree of ‘‘home bias’’ displayed by investor portfolios? We find that the answer is no, so long as individuals have access to free international trade in financial assets. In particular, it is never optimal to exhibit home bias with respect to domestic traded-good equities. By contrast, holdings...
متن کاملJump-Diffusion International Asset Pricing with Nontraded Consumption Goods
We present a jump-diffusion international asset pricing model with stochastic exchange rates and inflation rates when investors consume both traded and nontraded goods. We argue that in general, the Adler-Duma inflation rate differential may not capture PPP deviation risks, unless all volatilities, drift rates and jumps rates for price levels, exchange rates and asset returns are constant, and ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: International Review of Economics & Finance
سال: 2018
ISSN: 1059-0560
DOI: 10.1016/j.iref.2018.03.022