Session 3: Apple Product Prices, the Law of One Price and Real Exchange Rate Dynamics

This research uses an Apple Price Product dataset to explain the law of one price and how this relates to real exchange rate dynamics. This dataset is used because:

1. The products are homogenous
2. The products are tradable
3. There is no ‘product’ or ‘time aggregation’ bias
4. Derived RERs can be measured in price levels
5. Products distributed internationally
6. Imported from China and Taiwan and then distributed
7. Easier to net out transaction costs and taxes, tariffs shipping costs can be accounted for