Développement financier et ouverture au commerce
AbstractThis paper proposes an international trade model under uncertainty in which international differences in financial development provide the basis for trade. When preferences exhibit risk vulnerability as defined by Gollier and Pratt , financial development reduces individuals’ risk aversion. Hence, international differences in financial development can induce international differences in risk aversion. We show that all the individuals have the feeling that trade is welfare improving before the resolution of uncertainty. So, all individuals are in favour of free trade ex ante. But, the ex post welfare of the more risk averse country can decrease after the resolution of uncertainty. Contrary to the less risk averse country, the more risk averse country, with the less developed financial system, is likely to regret his decision in favour of free trade commitment.
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Bibliographic InfoPaper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/96.
Date of creation: 2007
Date of revision:
Publication status: Published in Cahier de recherche EURISCO, 2007
Commerce; Développement économique;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
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