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Monopolistic Competition and International Trade: Reconsidering the Evidence

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  • Hummels, D.
  • Levinsohn, J.

Abstract

The authors test some propositions about international trade flows that are derived from models of monopolistic competition developed by Elhanan Helpman and Paul Krugman. The authors investigate whether the volume of trade between OECD countries is consistent with the predictions of a model in which all trade is intraindustry trade in differentiated products. They then repeat the test with non-OECD countries. The authors also investigate whether the share of intraindustry trade is consistent with a more general theoretical model in which some, but not all, trade is intraindustry trade. Their results lead the authors to question the apparent empirical success of these models. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 339.

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Length: 28 pages
Date of creation: 1993
Date of revision:
Handle: RePEc:mie:wpaper:339

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Postal: ANN ARBOR MICHIGAN 48109
Web page: http://www.fordschool.umich.edu/rsie/
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Keywords: trade policy ; competition;

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  1. repec:fth:michin:324 is not listed on IDEAS
  2. Hummels, David & Levinsohn, James A, 1993. "Product Differentiation as a," American Economic Review, American Economic Association, vol. 83(2), pages 445-49, May.
  3. Hummels, D. & Levinsohn, J., 1993. "Product Differentiation as a Source of Comparative Advantage?," Working Papers 324, Research Seminar in International Economics, University of Michigan.
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