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The problem with this example is the difference between traded and non-traded goods. Loafs of bread are rarely traded across borders.
by kszx 12y ago
The problem with this example is the difference between traded and non-traded goods. Loafs of bread are rarely traded across borders.
- gambiting 12y agoNo, but in EU people very frequently cross borders to buy fuel, or cigarettes. For example - people living in Germany close to the Polish border will frequently cross to Poland to buy cheaper petrol, alcohol or cigarettes. Those things are much cheaper in Poland, because the avarage wages are many times lower than the German ones, so everything has to be cheaper to be affordable. And then I know many places close to the Polish-Slovakian border which have shops that accept Euros, purely because they got so many shoppers from Slovakia coming in to buy everything(including bread) cheaper then in their own country. With the Schoengen zone eliminating lengthy passport controls, driving to a different country that's 10 minutes away or a supermarket that's also 10 minutes away is exactly the same.