TY  - JOUR
AU  - Ghosh,Atish R.
AU  - Wolf,Holger C.
TI  - Pricing in International Markets: Lessons From The Economist
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4806
PY  - 1994
Y2  - July 1994
UR  - http://www.nber.org/papers/w4806
L1  - http://www.nber.org/papers/w4806.pdf
N1  - Author contact info:
Atish R. Ghosh
Research Department
International Monetary Fund
HQ1-09-612
700 19th Street, N.W.
Washington DC, 20431
E-Mail: aghosh@imf.org

Holger C. Wolf
Center for German and European Studies
ICC-503
School of Foreign Service
Georgetown University
Washington, DC  20057
Tel: 202/687-8079
Fax: 202/687-8359
E-Mail: moneyhist@aol.com
AB  - Export firms are often assumed to stabilize destination market prices in the face of nominal exchange rate changes in order to protect market share.  We show that standard tests of such pricing to market fail to discriminate against the alternative hypothesis of menu costs.  As a case study, we examine the characteristics and determinants of changes in the cover prices of The Economist magazine in a sample of twelve countries over the floating rate period.  We find that, while the law of one price fails, there is no evidence of systematic attempts to offset nominal exchange rate movements. Instead, the findings are consistent with menu cost driven pricing behavior.
ER  -