Unilateral reforms, trade blocs, and law of one price: MERCOSUR rice markets
✍ Scribed by Ralph Bierlen; Eric J. Wailes; Gail L. Cramer
- Publisher
- John Wiley and Sons
- Year
- 1998
- Tongue
- English
- Weight
- 162 KB
- Volume
- 14
- Category
- Article
- ISSN
- 0742-4477
No coin nor oath required. For personal study only.
✦ Synopsis
The current study tests for the law of one price (LOP) in MERCOSUR rice markets and between the MERCOSUR and major rice exporters in the light of recent Argentinean and Brazilian unilateral reforms and regional integration. Johansen's multivariate cointegration testing procedures support the existence of the LOP in both instances in the post-(but not the pre-) unilateral reform and regional integration period. This is consistent with the notion that bloc and nonbloc members can both enjoy the benefits of unilateral reforms by a bloc member when the external bloc tariff is not prohibitive.