International Prices, Costs, and Markup Differences

By Gita Gopinath, P. Gourinchas, Chang-tai Hsieh, Nicholas Li. 2011

222 citations recorded by the source corpus.

Relative cross-border retail prices, in a common currency, comove closely with the nominal exchange rate. Using product-level prices and wholesale costs from a grocery chain operating in the United States and Canada, we decompose this variation into relative costs and markup components. The high correlation of nominal and real exchange rates is driven mainly by changes in relative costs. National borders segment markets. Retail prices respond to changes in costs in neighboring stores within the same country but not across the border. Prices have a median discontinuous change of 24 percent at the border and 0 percent at state boundaries. (JEL F31, L11, L81)

Subfields: Economics and Econometrics, Marketing

View Paper: https://www.semanticscholar.org/paper/75dfe701c0dc11daab89a0e75a963c03f66ab2aa

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Citations in the corpus

Rural Roads and Intermediated Trade: Regression Discontinuity Evidence from Sierra Leone (IGC Working Paper) (2012, background): “7See, for example, Broda and Weinstein (2008), Burstein and Jaimovich (2009), Gopinath et al. (2011), Borraz et al (2012) and Atkin and Donaldson (2012). the search frictions case, as well as the theoretical setup, are based on Chau, Goto and Kanbur (2009).”
House Prices, Local Demand, and Retail Prices (2019, unknown): “In the short-run, rents are largely a fixed cost (Gopinath et al., 2011).”
Uniform Pricing in U.S. Retail Chains* (2019, methodology): “Examples beyond those cited above include Broda and Weinstein (2008), Gopinath et al. (2011), Fitzgerald and Nicolini (2014), Coibion, Gorodnichenko, and Hong (2015), Handbury and Weinstein (2015), Kaplan and Menzio (2015), and Dubé, Hitsch, and Rossi (forthcoming).”
Currency Unions, Product Introductions, and the Real Exchange Rate* (2014, background): “Gopinath et al. (2011), Broda and Weinstein (2008), and Burstein and Jaimovich (2009) document large cross-country price differences for identical goods sold in the United States and Canada.6 Crucini, Telmer, and Zachariadis (2005) examined prices across Europe from 1975 to 1990 for several…”
Goods Prices and Availability in Cities (2011, methodology): “Barcode price data has also been used extensively in the study of PPP convergence (see a recent survey by Burstein and Gopinath (2013)) and PPP convergence (see, e.g., Broda et al. (2008); Burstein and Jaimovich (2009); Gopinath et al. (2011)).”
Pricing-to-Market: Evidence From Plant-Level Prices (2014, background): “†Department of Economics, Stanford University, Stanford, CA 94305, dfitzger at stanford.edu ‡Economic and Social Research Institute, Whitaker Square, Sir John Rogerson’s Quay, Dublin 2, Ireland, stefanie.haller at esri.ie”
International Prices and Exchange Rates (2013, unknown): “…factor that can explain the difference in findings is that the data in Broda and Weinstein (2008) is from multiple retail chains, while the data in Gopinath et al. (2011) and Burstein and Jaimovich (2008) is from the same retail chain.6 Empirical Finding 2 Movements in RERs for tradeable goods…”
Multi-Product Firms and Product Quality (2017, unknown): “Finally, the stylized facts we uncover indirectly inform studies of exchange rate pass-through 3 to producer and consumer prices (c.f. Gopinath et al. 2011).”
The Empirics of Firm Heterogeneity and International Trade (2012, background): “…research suggests that these trade and distribution networks may be important for a variety of issues in international trade, such as the border e ect, exchange rate pass-through and the relationship between nominal and real exchange rates, as in Burstein et al. (2005) and Li et al. (2011).”