Inflation, price dispersion and market integration through the lens of a monetary search model

Analysing changes in market integration

Analysing changes in market integration through a cross-sectional test for the law of one price

✍ Konstantin Gluschenko 📂 Article 📅 2004 🏛 John Wiley and Sons 🌐 English ⚖ 148 KB 👁 2 views

## Abstract This paper presents a theoretical argument that the relationship between price differences and per capita income differences across locations can be used as a cross‐sectional test for the law of one price. Since the relationship should be statistically insignificant or very weak in an i