International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
AbstractThis paper builds a circular road model of the world with horizontal product differentiation and free entry and exit of firms, to show that freer international trade increases welfare -with ideal variety preferences- through the exploitation of economies of scale and better allocative efficiency, that all participating countries gain from trade, and that smaller countries have more to win from free trade than larger countries. Political resistance to trade liberalization, international migration and foreign direct investment are also analyzed with the model. Finally, the model provides a microfoundation for the use of demand curves with constant and negative slopes.
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Bibliographic InfoArticle provided by UNIVERSIDAD DEL ROSARIO in its journal REVISTA DE ECONOMÍA DEL ROSARIO.
Volume (Year): (2006)
Issue (Month): ()
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monopolistic competition; horizontal product differentiation; internationaltrade; international migration; foreign direct investment;
Other versions of this item:
- Hernán Vallejo G, 2005. "International Trade, Migration And Investment With Horizontal Product Differentiation And Free Entry And Exit Of Firms," DOCUMENTOS CEDE, UNIVERSIDAD DE LOS ANDES-CEDE 002917, UNIVERSIDAD DE LOS ANDES-CEDE.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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.:
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1997024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Sep 1997.
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