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Gains from Trade with Overlapping Generations

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Author Info
Kemp, Murray C
Wong, Kar-yiu

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Abstract

This paper examines the welfare effects of international trade in a context of overlapping generations. It shows that, for a single trading country, uncompensated free trade may be Pareto inferior to autarky. However, for each government there are compensation schemes which guarantee welfare improvements for all local individuals when free trade is allowed, or when for a small open economy the terms of trade improve or the number of tradable goods increases, or when a customs union is formed.

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Publisher Info
Article provided by Springer in its journal Economic Theory.

Volume (Year): 6 (1995)
Issue (Month): 2 (July)
Pages: 283-303
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Handle: RePEc:spr:joecth:v:6:y:1995:i:2:p:283-303

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  1. Kenji Fujiwara, 2006. "Why Resisting Globalization Can Be Reasonable," Economics Bulletin, Economics Bulletin, vol. 6(5), pages 1-8. [Downloadable!]
  2. Claustre Bajona & Timothy J. Kehoe, 2006. "Demographics in dynamic Heckscher-Ohlin models: overlapping generations versus infinitely lived consumers," Staff Report 377, Federal Reserve Bank of Minneapolis. [Downloadable!]
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  3. Takumi Naito & Laixun Zhao, 2008. "Aging, transitional dynamics, and gains from trade," Discussion Paper Series 215, Research Institute for Economics & Business Administration, Kobe University. [Downloadable!]
    Other versions:
  4. Serdar Sayan & Ali Emre Uyar, 2002. "Directions of Trade Flows and Labor Movements between High- And Low-Population Growth Countries: An Overlapping Generations General Equilibrium Analysis," GE, Growth, Math methods 0203003, EconWPA. [Downloadable!]
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