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Some Economics of Integrated and Segmented Markets

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Author Info
Donald J. Wright (University of Sydney, Australia)

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Abstract

For the purposes of the discussion in this paper, whether markets are integrated or segmented is endogenous and is determined by the interaction of demand parameters, tariffs, transportation costs, and arbitrage. Given certain restrictions, it is shown, in equilibrium, that policymakers choose tariffs to segment markets. The effects of trade liberalization (reducing all tariffs to zero) in an endogenous market structure framework are determined and compared to the existing literature. The results differ substantially, highlighting the importance of explicit modeling of costly arbitrage in imperfectly competitive models. Copyright Blackwell Publishing Ltd. 2003

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of International Economics.

Volume (Year): 11 (2003)
Issue (Month): 1 (February)
Pages: 72-89
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Handle: RePEc:bla:reviec:v:11:y:2003:i:1:p:72-89

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This page was last updated on 2009-12-19.

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