Vertical product differentiation and the import demand function: theory and evidence
AbstractIn this paper we use a model of vertical product differentiation to cast doubt on the general validity of the import demand function as specified in macroeconomic models. The empirical importance of our theoretical concerns is then established. According to our first hypothesis, the share of a good's imports in total imports is non-increasing in domestic wages if the country has comparative advantage in high-quality varieties of this good. The second hypothesis states that the share of a good's imports is increasing in non-wage domestic income if the country has comparative advantage in high-quality varieties of this good.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 35 (2002)
Issue (Month): 2 (May)
Contact details of provider:
Postal: Canadian Economics Association Prof. Steven Ambler, Secretary-Treasurer c/o Olivier Lebert, CEA/CJE/CPP Office C.P. 35006, 1221 Fleury Est Montréal, Québec, Canada H2C 3K4
Web page: http://economics.ca/cje/
More information through EDIRC
Other versions of this item:
- Jim Malley & Thomas Moutos, 2000. "Vertical Product Differentiation and the Import Demand Function: Theory and Evidence," CESifo Working Paper Series 387, CESifo Group Munich.
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rudiger Dornbusch, 1987.
"Exchange Rates and Prices,"
NBER Working Papers
1769, National Bureau of Economic Research, Inc.
- Hausman, Jerry A, 1978.
"Specification Tests in Econometrics,"
Econometric Society, vol. 46(6), pages 1251-71, November.
- Obstfeld, Maurice, 1982.
"Aggregate Spending and the Terms of Trade: Is There a Laursen-Metzler Effect?,"
The Quarterly Journal of Economics,
MIT Press, vol. 97(2), pages 251-70, May.
- Maurice Obstfeld, 1981. "Aggregate Spending and the Terms of Trade: Is There a Laursen-Metzler Effect?," NBER Working Papers 0686, National Bureau of Economic Research, Inc.
- repec:aah:aarhec:1993-1 is not listed on IDEAS
- Dixon, H. & Rankin, N., 1991.
"Imperfect Competition and Macroeconomics: a Survey,"
The Warwick Economics Research Paper Series (TWERPS)
387, University of Warwick, Department of Economics.
- Dixon, Huw David & Rankin, Neil, 1994. "Imperfect Competition and Macroeconomics: A Survey," Oxford Economic Papers, Oxford University Press, vol. 46(2), pages 171-99, April.
- Dixon, Huw David & Rankin, Neil, 1992. "Imperfect Competition and Macroeconomics: A Survey," CEPR Discussion Papers 636, C.E.P.R. Discussion Papers.
- Benavie, Arthur, 1973. "Imports in Macroeconomic Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 530-32, June.
- Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, vol. 77(5), pages 810-22, December.
- Bhargava, Alok, 1986. "On the Theory of Testing for Unit Roots in Observed Time Series," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 369-84, July.
- Greenaway, David & Hine, Robert C & Milner, Chris, 1995. "Vertical and Horizontal Intra-industry Trade: A Cross Industry Analysis for the United Kingdom," Economic Journal, Royal Economic Society, vol. 105(433), pages 1505-18, November.
- Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977.
"Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods,"
American Economic Review,
American Economic Association, vol. 67(5), pages 823-39, December.
- R. Dornbusch & S. Fischer & P. A. Samuelson, 1976. "Comparative Advantage, Trade and Payments in a Ricardian Model With a Continuum of Goods," Working papers 178, Massachusetts Institute of Technology (MIT), Department of Economics.
- Rose, Andrew K. & Yellen, Janet L., 1989. "Is there a J-curve?," Journal of Monetary Economics, Elsevier, vol. 24(1), pages 53-68, July.
- Krugman, P., 1993. "What Do We Need to Know About the International Monetary System?," Princeton Studies in International Economics 190, International Economics Section, Departement of Economics Princeton University,.
- Falvey, Rodney E., 1981. "Commercial policy and intra-industry trade," Journal of International Economics, Elsevier, vol. 11(4), pages 495-511, November.
- James A. Brander, 1995.
"Strategic Trade Policy,"
NBER Working Papers
5020, National Bureau of Economic Research, Inc.
- Rose, Andrew K., 1991. "The role of exchange rates in a popular model of international trade : Does the 'Marshall-Lerner' condition hold?," Journal of International Economics, Elsevier, vol. 30(3-4), pages 301-316, May.
- Malley, Jim & Moutos, Thomas, 2006.
"Do excessive wage increases raise imports?: Theory and evidence,"
Japan and the World Economy,
Elsevier, vol. 18(2), pages 194-220, March.
- Jim Malley & Thomas Moutos, 2001. "Do Excessive Wage Increases Raise Imports? Theory and Evidence," CESifo Working Paper Series 467, CESifo Group Munich.
- Jim Malley & Thomas Moutos, . "Do Excessive Wage Increases Raise Imports? Theory and Evidence," Working Papers 2000_19, Business School - Economics, University of Glasgow.
- Jim Malley & Thomas Moutos, 2004. "Do excessive wage increases raise imports? Theory and evidence," Macroeconomics 0401003, EconWPA.
- Margarita Katsimi & Thomas Moutos, 2005. "Inequality and Relative Reliance on Tariffs: Theory and Evidence," CESifo Working Paper Series 1457, CESifo Group Munich.
- Eugenia Fotoniata & Thomas Moutos, 2011.
"Product Quality, Informality, and Child Labour,"
CESifo Working Paper Series
3537, CESifo Group Munich.
- Antonis Adam & Margarita Katsimi & Thomas Moutos, 2012.
"Inequality and the import demand function,"
Oxford Economic Papers,
Oxford University Press, vol. 64(4), pages 675-701, October.
- Antonis Adam & Thomas Moutos, 2002. "The Political Economy of EU Enlargement: Or, Why Japan is not a Candidate Country?," CESifo Working Paper Series 704, CESifo Group Munich.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.