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On North-South Intra- and Inter-Industry Trade and Welfare

Author

Listed:
  • John Gilbert

    (Department of Economics and Finance, Utah State University)

  • Hamid Beladi

    (UTSA)

  • Reza Oladi

    (Department of Applied Economics, Utah State University)

Abstract

We consider a general equilibrium model of a developing economy (the South) that trades with a developed economy (the North). The Southern economy is characterized by open urban unemployment and rural-urban migration, and by a monopolistically competitive manufacturing sector. Given a minimum wage that is binding in the South, the developing economy exports agricultural goods, which are produced under competitive conditions in the rural economy, in addition to engaging in intra-industry trade in manufactures. We describe the welfare consequences of simultaneous North-South trade of both the inter- and intra-industry variety.

Suggested Citation

  • John Gilbert & Hamid Beladi & Reza Oladi, 2014. "On North-South Intra- and Inter-Industry Trade and Welfare," Working Papers 0139eco, College of Business, University of Texas at San Antonio.
    • Handle: RePEc:tsa:wpaper:0139eco
    as

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    File URL: http://interim.business.utsa.edu/wps/eco/0001ECO-414-2014.pdf
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    References listed on IDEAS

    as
    1. Reza Oladi & John Gilbert, 2011. "Monopolistic Competition and North–South Trade," Review of International Economics, Wiley Blackwell, vol. 19(3), pages 459-474, August.
    2. Gros, Daniel, 1987. "A note on the optimal tariff, retaliation and the welfare loss from tariff wars in a framework with intra-industry trade," Journal of International Economics, Elsevier, vol. 23(3-4), pages 357-367, November.
    3. Reza Oladi & Hamid Beladi, 2008. "Is Regionalism Viable? A Case for Global Free Trade," Review of International Economics, Wiley Blackwell, vol. 16(2), pages 293-300, May.
    4. Helpman, Elhanan, 1981. "International trade in the presence of product differentiation, economies of scale and monopolistic competition : A Chamberlin-Heckscher-Ohlin approach," Journal of International Economics, Elsevier, vol. 11(3), pages 305-340, August.
    5. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Trade and monopolistic competition; Urban unemployment; North-South trade;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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