David Atkin and Dave Donaldson are presenting this paper tomorrow afternoon at the NBER summer institute:
This paper uses a newly collected dataset on the prices of narrowly defined goods across many dispersed locations within multiple developing countries to address the question, How large are the costs that separate households in developing countries from the global economy? Guided by a flexible model of oligopolistic intermediation with variable mark-ups, our analysis proceeds in four steps. first, we measure total intranational trade costs (ie marginal costs of trading plus mark-ups on trading) using price gaps over space within countries—but we do so only among pairs of locations that are actually trading a good by drawing on unique data on the location of production of each good. Second, we estimate, separately by location and commodity, the passthrough rate between the price at the location of production and the prices paid by inland…
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