Unilateral Trade Liberalization in the Melitz Model: A Note
AbstractIn the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector. We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 32 (2012)
Issue (Month): 2 ()
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Monopolistic Competition; Heterogeneous Firms; International Trade; Trade Policy;
Other versions of this item:
- Felbermayr, Gabriel & Jung, Benjamin, 2012. "Unilateral trade liberalization in the Melitz model: A note," University of Tuebingen Working Papers in Economics and Finance 30, University of Tuebingen, Faculty of Economics and Social Sciences.
- F1 - International Economics - - Trade
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
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