Date of Award
Doctor of Philosophy
Morshed, AKM Mahbub
In the first chapter, entitled “On Cross-country Differences in the Contribution of Nontraded Goods to Real Exchange Rate Fluctuations”, The contribution of nontraded goods to Real Exchange Rate (RER) fluctuations for a large number of countries that include high, middle, and low-income countries are estimated using Engel’s (1999, JPE) approaches. We also propose a new quantity dual approach which does not require any assumption regarding the functional form for either the production function or for the overall price index to estimate similar measures. All the three approaches used yield qualitatively similar estimates, but there exists a large cross-country variation in the contributions of the nontraded goods to RER fluctuations. Income, government expenditure, exchange rate volatility, and political stability are found to be negatively correlated to the contributions of nontraded goods, while inflation, consumption expenditure, and openness are positively correlated to the contributions of nontraded goods to RER fluctuations. In the second chapter, entitled “The Great Recession and Price Convergence in the United States”, We analyze the differential nature of commodity price convergence in cities in the U.S.A. before and after the Great Recession of 2008. Using quarterly retail price data for 50 commodities from 279 cities for the period 1992- 2014, we show that the speed of price convergence for almost all the commodities increased after the great recession, and that observation is more pronounced for nonperishable prices. We also observe that the price convergence disparity between the most and the least affected states widened, with the most affected areas experiencing much higher speed of price convergence than before the Great Recession. Moreover, the geographic variations of changes in rate of convergence are noteworthy. In the third chapter, entitled “Language, Topography, and Price Convergence”, we ask what else can downgrade technological innovations, improvement of transportation infrastructures, and other policy tools in boosting integrations of commodity markets? This paper analyzes the impact of two highly exogenous variables – languages and elevations - on retail price convergence which indicates the level of market integration. Using data from a very ethnic and topographically diversified country- India- we show that language and topographical variations represent intrinsic barriers to market integration and should not be overlooked. Therefore, ceteris paribus, a country with more similarities in languages and less variation in topographical features is likely to benefit more from technological improvements and from the improvement of transportation infrastructures due to the resulting faster rate of convergence.
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