NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Overcoming Informational Barriers to International Resource Allocation: Prices and Group Ties

James E. Rauch, Alessandra Casella

NBER Working Paper No. 6628
Issued in June 1998
NBER Program(s):   ITI

Incomplete information in the international market creates difficulty in matching agents with productive opportunities and interferes with the ability of prices to allocate scarce resources across countries. Resource-price differentials may not be eliminated and domestic resource supplies may have excessive influence on domestic resource prices. Information-sharing networks among internationally dispersed ethnic minorities or business groups can improve the allocation of resources, though at the same time they may hurt those excluded from the preferential information channels. However, when ties are denser between countries with small resource price differences than between countries with large resource price differences, such networks can worsen the allocation of resources and reduce the value of world output.

download in pdf format
   (1629 K)

email paper

This paper is available as PDF (1629 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6628

Published: "Overcoming Informational Barriers to International Resource Allocation: Prices and Ties" , Economic Journal, Vol. 113 (January 2003), pp. 21-42.

Users who downloaded this paper also downloaded these:
Rauch w5618 Trade and Search: Social Capital, Sogo Shosha, and Spillovers
Casella and Rauch w6186 Anonymous Market and Group Ties in International Trade
Rauch w5617 Networks versus Markets in International Trade
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us