Global firms use exchange rates to boost profits in foreign markets
The article explores why prices differ between countries when companies sell their products abroad or at home. It suggests that companies adjust their prices based on market conditions and competition. By studying data from the 1990s, the researchers found that exchange rates have a small impact on price differences. They also discovered that prices tend to rise and fall with the economy, and that competition plays a role in pricing decisions. The study hints at how joining the European Monetary Union could affect prices in the future.