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...

The United States and Brazil both have many local consumer markets which imported cement can access by waterway. Despite this similarity, the degree of import penetration is strikingly di¤erent. While imports from around the world account for as much as 30% of U.S. cement consumption, Brazil hardly imports cement. U.S. cement producers, facing lower inbound trade costs and higher marginal costs...

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 ...

A dynamic development of financial market is accompanied by the emergence of new products on stock exchanges which give absolutely new possibilities of investing money. Currently, the most innovative financial instruments offered to investors are exchange traded products (ETP). They can be defined as financial instruments whose price depends on the value of the underlying instrument. Thus, they...

This study examines the significant impact of exchange rate shock on prices of Malaysian importsand exports. In methodology, the study adopts vector error correction (VECM) model using monthlydata of nominal exchange rates, money supply, prices of imports and prices of exports covering theperiod of M1:1999 to M12:2006. For further analysis, we adopt an innovation accounting bysimulating varianc...

Many past studies documented a strong evidence of a linkage between stock prices and macroeconomic activities across different stock markets and time horizons. However, most of these studies have focused on developed economies and highlighted the impact of either domestic variables or a few global factors. In recent times, the impact of global macroeconomic factors upon stock returns has garner...