01863cas a2200253 a 4500 AALejournalIMF005035 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451869835 1018-5941 BD-DhAAL BD-DhAAL Juvenal, Luciana. Mexico's Integration into NAFTA Markets : A View from Sectoral Real Exchange Rates and Transaction Costs / Luciana Juvenal, Rodolphe Blavy. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students A self-exciting threshold autoregressive model is used to measure transaction costs that may explain relative price differentials and nonlinearities in the behavior of sectoral real exchange rates across Mexico, Canada and the U.S. Interpreting price threshold bands as transactions costs, we find evidence that Mexico still face higher transaction costs than their developed counterparts, even though trade liberalization lowers relative price differentials between countries. The distance between countries and nominal exchange rate volatility are found to be determinants of transaction costs that limit price convergence. Other factors-including weak domestic competition and transportation-are also likely to be important. Mode of access: Internet Blavy, Rodolphe. IMF Working Papers; Working Paper ; No. 2008/123 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/123/001.2008.issue-123-en.xml IMF e-Library