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Russia's Internal Border

Author

Listed:
  • Daniel Berkowitz
  • David DeJong
Abstract
In integrated economies, inter-city price differences can be explained largely by transportation costs. This is not the case in Russia. Here, we argue that this is due to an internal border that separates a region we denote as the Red Belt from the rest of Russia. Regions within the Red Belt exhibit high degrees of price dispersion and thus seem isolated. Moreover, these regions have been relatively slow to adopt economic reforms, and have suffered relatively low growth rates. The impact of the border on price dispersion is shown to be comparable to the impact of the U.S.-Canadian border.

Suggested Citation

  • Daniel Berkowitz & David DeJong, 1998. "Russia's Internal Border," William Davidson Institute Working Papers Series 189, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:1998-189
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    References listed on IDEAS

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    More about this item

    Keywords

    price dispersion; market integration;

    JEL classification:

    • P22 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Prices
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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