This paper provides empirical evidence of the role of spatial factors on the determination of inflation dynamics for a representative set of tradable commodities in Chile. We present a simple model that explains inflation divergence across regions in a monetary union with similar preferences as...

Recent evidence on the respective contributions of institutions and trade to income levels across countries has demonstrated that - once endogeneity is considered - institutional quality clearly dominates the effect of trade. We argue that overall trade is not the most appropriate measure for...