We reexamine the effect of the U.S./Canadian border on integration of markets. The paper updates work from our earlier paper, Engel and Rogers (1996). We consider alternative measures of deviations from the law of one price. We pay special attention to the effect of the U.S.-Canada free trade...

We reexamine the effect of the U.S./Canadian border on integration of markets. The paper updates work from our earlier paper, Engel and Rogers(1996). We consider alternative measures of deviations from the law of one price. We pay special attention to the effect of the U.S-Canada free trade...

When equity prices are determined as the discounted sum of current and expected future dividends, Shiller (1981) and LeRoy and Porter (1981) derived a relationship between the variance of the price of equities, p(t), and the variance of the ex post realized discounted sum of current and future...

Economic agents undertake actions to protect themselves from the short-run impact of foreign exchange rate fluctuations: Nominal goods prices are set in consumers' currencies, and firms hedge foreign exchange risk. A model is presented here which shows that these features of the economy can lead...