This paper develops a general equilibrium model of world trade, based on the technology proposed by Eaton and Kortum. We study the existence and uniqueness of equilibrium. We propose and test an algorithm for calculating equilibria. We test the ability of a calibrated version of the model to account for trade volumes, and use the theory to simulate the gains from hypothetical trade liberalizations.
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Paper provided by Society for Economic Dynamics in its series 2004 Meeting Papers with number
623.
Length: Date of creation: 2004 Date of revision: Handle: RePEc:red:sed004:623
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