Why is re a large variance transport costs

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Reference no: EM1369394

Q. Why? There must be something that prevents arbitrage across countries. Transportation costs would prevent consumers from arbitraging. But does that really explain apparent volatility in deviations from law of one price? Even though transport costs could allow for large variance, why is re a large variance? Do we see same sort of variance for prices in markets within a country that are segmented by large distances?

Reference no: EM1369394

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