This paper studies the formation of stock prices for British, German and French stocks, simultaneously traded in London and Frankfurt or Paris. We analyze theoretically the case where investors and traders based in the same country as the ̄rm have better information on its value than foreign traders. Our model implies that prices set on the domestic market should be informationally more e±cient...

Domestic US sugar production has been protected by government policy for the past 82 years, resulting in elevated domestic prices and an estimated annual (2013) $1.4 billion dollar ‘‘tax’’ on consumers. These elevated prices and the simultaneous federal support for domestic corn production have ensured a strong market for highfructose corn syrup. Americans have dramatically increased their cons...

Building on the political economy literature, we develop a conceptual model and apply it to explain the OPEC pricing behavior. We model OPEC as a cartel-of-nations where politician use two instruments: production quotas and domestic fuel consumption subsidies. Our model explains the wedge between domestic fuel prices in OPEC countries and in the rest of the world. The empirical estimates show t...

the law of one price (lop) in oilseeds market of iran (cotton, maize, and soybeans) is tested in the present study, using annual domestic data, and world prices for the period of 1992-2008. modern time series econometric analysis methods, including co-integration and error correction model are made use of. the main results obtained from the study confirms an in the long- run relationship betwee...

he Asian currency crisis of 1997-98 was characterized by an abrupt reversal of foreign capital flows. Before the crisis, foreign capital inflows had allowed the crisis countries to attain a higher level of investment spending than could have been supported by domestic saving alone. Domestic and foreign investors suddenly lost confidence, liquidating their local asset holdings, and moving their ...

How important is the effect of exchange rate fluctuations on the competitive environment faced by domestic firms and the prices they charge? To answer this question, this paper examines the 17% appreciation of the yuan against the US dollar from 2005 to 2008. In a monthly panel covering 110 sectors, a 1% appreciation of the Yuan increases US import prices by roughly 0.8%. It is then shown that ...

Significant effort has been exerted on the study of economic variables such as absolute energy prices to understand energy consumption and economic growth. However, this approach ignores general inflation effects, whereby the prices of baskets of goods may rise or fall at different rates from those of energy prices. Thus, it may be the relative energy price, not the absolute energy price, that ...