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Pro-competitive effects and harmful trade liberalization in multi-country world

Author

Listed:
  • Igor Bykadorov

    (MSSE NRU Higher School of Economics)

  • Andrea Ellero

    (Dept. of Management, Università Ca' Foscari Venice)

  • Stefania Funari

    (Dept. of Management, Università Ca' Foscari Venice)

  • Sergey Kokovin

    (MSSE NRU Higher School of Economics)

  • Pavel Molchanov

    (MSSE NRU Higher School of Economics)

Abstract

We study a multi-country trade model with two types of countries (big and small ones). The model generalizes the case of two countries analyzed in [3] and wonder whether there could be harm from trade. Monopolistic competition, iceberg type trade costs and variable elasticity of substitution (VES) are among the model assumptions. The effects of trade liberalization on price, production and welfare are analyzed, in cases of free trade and autarky.

Suggested Citation

  • Igor Bykadorov & Andrea Ellero & Stefania Funari & Sergey Kokovin & Pavel Molchanov, 2015. "Pro-competitive effects and harmful trade liberalization in multi-country world," Working Papers 6, Department of Management, Università Ca' Foscari Venezia.
    • Handle: RePEc:vnm:wpdman:107
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    References listed on IDEAS

    as
    1. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 1-54, Elsevier.
    2. Evgeny Zhelobodko & Sergey Kokovin & Mathieu Parenti & Jacques‐François Thisse, 2012. "Monopolistic Competition: Beyond the Constant Elasticity of Substitution," Econometrica, Econometric Society, vol. 80(6), pages 2765-2784, November.
    3. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    4. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    5. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    6. Costas Arkolakis & Arnaud Costinot & Dave Donaldson & Andrés Rodríguez-Clare, 2019. "The Elusive Pro-Competitive Effects of Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(1), pages 46-80.
    7. Bykadorov, Igor & Gorn, Alexey & Kokovin, Sergey & Zhelobodko, Evgeny, 2015. "Why are losses from trade unlikely?," Economics Letters, Elsevier, vol. 129(C), pages 35-38.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Igor Bykadorov & Andrea Ellero & Stefania Funari & Sergey Kokovin & Pavel Molchanov, 2016. "Painful Birth of Trade Under Classical Monopolistic Competition," HSE Working papers WP BRP 132/EC/2016, National Research University Higher School of Economics.

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    More about this item

    Keywords

    Monopolistic competition trade model; variable elasticity of substitution; iceberg type trade costs; free trade; autarky.;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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