TY  - JOUR
AU  - Rauch,James E.
AU  - Casella,Alessandra
TI  - Overcoming Informational Barriers to International Resource Allocation:  Prices and Group Ties
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6628
PY  - 1998
Y2  - June 1998
UR  - http://www.nber.org/papers/w6628
L1  - http://www.nber.org/papers/w6628.pdf
N1  - Author contact info:
James E. Rauch
Department of Economics
University of California, San Diego
La Jolla, CA 92093-0508
Tel: 858/534-2405
Fax: 858/534-7040
E-Mail: jrauch@weber.ucsd.edu

Alessandra Casella
Department of Economics
Columbia University
420 West 118 Street
New York, NY 10027
Tel: 212/854-2459
Fax: 212/854-8059
E-Mail: ac186@columbia.edu
AB  - 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.
ER  -