TY  - JOUR
AU  - Goldberg,Pinelopi K.
AU  - Knetter,Michael M.
TI  - Goods Prices and Exchange Rates: What Have We Learned?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5862
PY  - 1996
Y2  - December 1996
UR  - http://www.nber.org/papers/w5862
L1  - http://www.nber.org/papers/w5862.pdf
N1  - Author contact info:
Pinelopi K. Goldberg
Yale University
Department  of Economics
37 Hillhouse Ave.
P.O. Box 208264
New Haven, CT 06520-8264
E-Mail: penny.goldberg@yale.edu

Michael M. Knetter
School of Business
University of Wisconsin, Madison
5110 Grainger Hall
975 University Avenue
Madison, WI  53706-1323
Tel: 608/262-1758
Fax: NA
E-Mail: mike.knetter@supportuw.org
AB  - Import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country. Recent research indicates that common-currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets.  This evidence suggests that incomplete pass-through is a consequence of third-degree price discrimination.  While distance matters for market segmentation, borders have independent effects.  The source of the border effect has not been clearly identified. Furthermore, there is little evidence yet to suggest substantial market power is implied by the observed price discrimination.
ER  -