Gorodnichenko, Yuriy; Tesar, Linda L. - 2005
and foreign prices. We argue that the border effect can be inflated by the volatility and persistence of the nominal …"This paper reexamines the evidence on the border effect, the finding that the border drives a wedge between domestic … exchange rate and by the cross-country heterogeneity in the distribution of within-country price differentials. We develop a …