This study investigates the behaviour of intranational prices for 45 specific consumer goods across 25 Canadian cities. It finds positive roles for distance and provincial borders in intercity price disparities. While sizable, the provincial border effect is an order of magnitude smaller than the estimates for the Canada-U.S. border. A majority of the intercity relative price series are stationary around small mean values, indicating that long-run price differences are close to zero. The intercity prices converge at rates considerably faster than the consensus estimates for international prices. In fact, half-lives for intercity price deviations average well under a year. JEL Classification: F15, F31La loi d'un seul prix : re´sultats intra-nationaux pour le Canada. Ce me´moire examine le comportement des prix intra-nationaux de 45 biens de consommation spe´cifiques dans 25 villes canadiennes. Il semble que la distance et les frontie`res inter-provinciales ont un impact sur les diffe´rentiels de prix entre villes.Meˆme si l'impact des frontie`res interprovinciales est important, il est beaucoupplus petit que l'impact de la frontie`re Canada-U.S. Une majorite´des se´ries de prix relatifs entre villes sont stationnaires autour de petites valeurs moyennes, ce qui sugge`re que les diffe´rences de prix a`long terme s'approchent de ze´ro. Il est clair que les prix entre villes convergent a`des taux conside´rablement plus rapides que ce qu'on observe au niveau international. En fait les de´viations de prix entre villes ont une espe´rance de vie qui en moyenne est de moins d'un an.

International trade, services, gravity model,

In recent years wages in China have been rising and the yuan has appreciated, potentially eroding China's cost advantage in manufactures. This paper explores the evolution of China's relative unit labor costs in manufacturing over 1998 . Between 1998 China's unit labor costs fell, but since 2003 they have increased both absolutely and relative to US unit labor costs. Much of the rise in China's relative unit labor costs can be traced to a real appreciation of the yuan against the dollar. Despite the recent rise, China's unit labor costs remain low relative to those in most other countries.

This paper provides a new perspective on Chinese international competitiveness in manufacturing using relative unit labour costs. We find that Chinese unit labour costs are about 25-40 per cent of US labour costs. They are also low relative to costs in the EU, Japan, Mexico, Korea and most other newly industrialising countries. However, China's relative unit labour costs indicate a substantially smaller cost advantage than that implied by a comparison of wages alone. China's cost advantage derives from large currency devaluations that preceded the establishment of a de facto peg around 1995, and rapid productivity growth in the period since 1995. Copyright 2007 The Authors Journal compilation 2007 Blackwell Publishing Ltd .

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