The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Border Effects

  • John H. Rogers
Reference work entry


International finance and trade economists have traditionally focused on the behaviour of cross-country prices and factor returns and the flow of goods and capital across nations. Studying these same variables across locations within countries provides a baseline for measuring the influence of the border. The ‘border effect’ is the difference between international and intra-national magnitudes. Large border effects were initially found in consumer goods prices and trade volumes. Subsequent studies have examined robustness and looked for explanations of the border effect.


Border effects Distance Exchange rate volatility Gravity models Internal trade International trade barriers Market integration Price volatility Productivity shocks Purchasing power parity Sticky prices Trade flows Transaction costs Transportation costs United States–Canada Free Trade Agreement 

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • John H. Rogers
    • 1
  1. 1.