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On Nations' Size and Transportation Costs

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Author Info
Shachmurove, Yochanan
Spiegel, Uriel

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Abstract

This paper develops a noncooperative Nash model in which a closed border is opened to trade between countries that differ in size and transportation costs. The paper suggests an explanation as to why economists have not convinced policymakers to lift all barriers to free trade. The questions we pose are: Who will gain as a result of opening the borders? Is free trade beneficial to the two parties involved? Do they both share equally in the fruits of free trade? Which country, large or small, benefits most? It is shown that free trade is not beneficial to both countries. Copyright 1995 by Blackwell Publishing Ltd.

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

Volume (Year): 3 (1995)
Issue (Month): 2 (June)
Pages: 235-43
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Handle: RePEc:bla:reviec:v:3:y:1995:i:2:p:235-43

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

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  1. Tharakan, Joe & Thisse, Jacques-François, 2001. "The Importance of Being Small. Or When Countries are Areas and not Points," CEPR Discussion Papers 2938, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Tharakan, J., 2001. "Revisiting ÒOn nationsÕ size and transportation costsÓ," CORE Discussion Papers 2001032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  3. Yochanan Shachmurove & Uriel Spiegel, 2004. "Size Does Matter: International Trade and Population Size," PIER Working Paper Archive 04-035, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  4. Hartmut Egger & Peter Egger, 2004. "Outsourcing and Trade in a Spatial World," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Mario Marazzi, 2002. "On the fragility of gains from trade under continuously differentiated bertrand competition," International Finance Discussion Papers 735, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  6. THARAKAN, Joe & THISSE, Jacques-Franois, 2000. "The importance of being small : size effects in international trade," CORE Discussion Papers 2000001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  7. Yochanan Shachmurove & Tikva Leker, . ""The Effects of Immigration on Socioeconomic Gaps in Labor Managed System Versus in a Competitive System''," CARESS Working Papres 98-04, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences. [Downloadable!]
    Other versions:
  8. Hartmut Egger & Peter Egger, 2008. "The Trade and Welfare Effects of Mergers in Space," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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