AbstractThis paper develops a simple model of international trade with intermediation. We consider an economy with two islands and two types of agents, farmers and traders. Farmers can produce two goods, but in order to sell these goods in centralized (Walrasian) markets, they need to be matched with a trader, and this entails costly search. In the absence of search frictions, our model reduces to a standard Ricardian model of trade. We use this simple model to contrast the implications of changes in the integration of Walrasian markets, which allow traders from different islands to exchange their goods, and changes in the access to these Walrasian markets, which allow farmers to trade with traders from different islands. We find that intermediation always magnifies the gains from trade under the former type of integration, but leads to more nuanced welfare results under the latter, including the possibility of aggregate losses. These welfare losses may be circumvented, however, through policies that discriminate against foreign traders in a way that minimizes the margins charged by domestic traders.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15750.
Date of creation: Feb 2010
Date of revision:
Publication status: published as Pol AntrÃ s & Arnaud Costinot, 2011. "Intermediated Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1319-1374.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- D3 - Microeconomics - - Distribution
- D4 - Microeconomics - - Market Structure and Pricing
- F10 - International Economics - - Trade - - - General
- F15 - International Economics - - Trade - - - Economic Integration
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-06 (All new papers)
- NEP-DGE-2010-03-06 (Dynamic General Equilibrium)
- NEP-INT-2010-03-06 (International Trade)
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.:
- Marcel Fafchamps & Ruth Vargas Hill, 2004.
"Selling at the farm-gate or travelling to market,"
CSAE Working Paper Series
2004-30, Centre for the Study of African Economies, University of Oxford.
- Chau, Nancy & Goto, Hideaki & Kanbur, Ravi, 2009.
"Middlemen, Non-Profits, and Poverty,"
IZA Discussion Papers
4406, Institute for the Study of Labor (IZA).
- Chau, Nancy H & Goto, Hideaki & Kanbur, Ravi, 2009. "Middlemen, Non-Profits and Poverty," CEPR Discussion Papers 7459, C.E.P.R. Discussion Papers.
- Chau, Nancy H. & Goto, Hideaki & Kanbur, Ravi, 2009. "Middlemen, Non-Profits, and Poverty," Working Papers 55931, Cornell University, Department of Applied Economics and Management.
- Helpman, Elhanan & Itskhoki, Oleg & Redding, Stephen J., 2009.
"Inequality and Unemployment in a Global Economy,"
CEPR Discussion Papers
7353, C.E.P.R. Discussion Papers.
- Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2009. "Inequality and Unemployment in a Global Economy," CEP Discussion Papers dp0940, Centre for Economic Performance, LSE.
- Elhanan Helpman & Oleg Itshoki & Stephen Redding, 2009. "Inequality and unemployment in a global economy," LSE Research Online Documents on Economics 25501, London School of Economics and Political Science, LSE Library.
- Elhanan Helpman & Oleg Itskhoki & Stephen Redding, 2008. "Inequality and Unemployment in a Global Economy," NBER Working Papers 14478, National Bureau of Economic Research, Inc.
- Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, October.
- Marcel Fafchamps & Ruth Hill, 2005.
"Price Transmission and Trader Entry in Domestic Commodity Markets,"
Economics Series Working Papers
GPRG-WPS-038, University of Oxford, Department of Economics.
- Marcel Fafchamps & Ruth Vargas Hill, 2008. "Price Transmission and Trader Entry in Domestic Commodity Markets," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 729-766.
- Antràs, Pol & Costinot, Arnaud, 2010.
"Intermediation and Economic Integration,"
CEPR Discussion Papers
7697, C.E.P.R. Discussion Papers.
- Costinot, Arnaud & Antras, Pol, 2010. "Intermediation and Economic Integration," Scholarly Articles 4784026, Harvard University Department of Economics.
- Pol Antràs & Arnaud Costinot, 2010. "Intermediation and Economic Integration," NBER Working Papers 15751, National Bureau of Economic Research, Inc.
- Gary Biglaiser, 1993. "Middlemen as Experts," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 212-223, Summer.
- Carsten Eckel, 2009.
"International Trade and Retailing,"
CESifo Working Paper Series
2597, CESifo Group Munich.
- Arnaud Costinot, 2009.
"Jobs, Jobs, Jobs: A "New" Perspective on Protectionism,"
Journal of the European Economic Association,
MIT Press, vol. 7(5), pages 1011-1041, 09.
- Costinot, Arnaud, 2008. "Jobs, Jobs, Jobs: A "New" Perspective on Protectionism," University of California at San Diego, Economics Working Paper Series qt1cp9749b, Department of Economics, UC San Diego.
- JaeBin Ahn & Amit K. Khandelwal & Shang-Jin Wei, 2010.
"The Role of Intermediaries in Facilitating Trade,"
NBER Working Papers
15706, National Bureau of Economic Research, Inc.
- Davidson, Carl & Martin, Lawrence & Matusz, Steven, 1988. "The Structure of Simple General Equilibrium Models with Frictional Unemployment," Journal of Political Economy, University of Chicago Press, vol. 96(6), pages 1267-93, December.
- David Hummels & Volodymyr Lugovskyy & Alexandre Skiba, 2007.
"The Trade Reducing Effects of Market Power in International Shipping,"
NBER Working Papers
12914, National Bureau of Economic Research, Inc.
- Hummels, David & Lugovskyy, Volodymyr & Skiba, Alexandre, 2009. "The trade reducing effects of market power in international shipping," Journal of Development Economics, Elsevier, vol. 89(1), pages 84-97, May.
- Morisset, Jacques, 1998. "Unfair Trade? The Increasing Gap between World and Domestic Prices in Commodity Markets during the Past 25 Years," World Bank Economic Review, World Bank Group, vol. 12(3), pages 503-26, September.
- Davidson, Carl & Martin, Lawrence & Matusz, Steven, 1999. "Trade and search generated unemployment," Journal of International Economics, Elsevier, vol. 48(2), pages 271-299, August.
- Akerman, Anders, 2010. "A Theory on the Role of Wholesalers in International Trade based on Economies of Scope," Research Papers in Economics 2010:1, Stockholm University, Department of Economics.
- Kunal Dasgupta & Jordi Mondria, 2012. "Quality Uncertainty and Intermediation in International Trade," Working Papers tecipa-462, University of Toronto, Department of Economics.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.