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Cultural Effects of Trade Liberalization

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Author Info

  • Steven M. Suranovic

    (The George Washington University)

  • Robert Winthrop

    (Bureau of Land Management, US Dept. of Interior)

Abstract

We incorporate culture into a standard trade model in two distinct ways. In the ¡°cultural affinity from work¡± model, workers receive a non- pecuniary cultural benefit from work in a particular industry. In the ¡°cultural externality¡± model, consumers of a product receive utility from other consumer¡¯s consumption of a domestic good. We show that resistance to change due to cultural concerns can reduce the national benefits from trade liberalization. Complete movements to free trade will have a positive national welfare impact in the cultural affinity case whereas it may lower national welfare in the cultural externality case. We also show that a loss of cultural benefits is more likely to occur in the externality model.

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File URL: http://128.118.178.162/eps/it/papers/0511/0511003.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 0511003.

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Length: 31 pages
Date of creation: 08 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0511003

Note: Type of Document - pdf; pages: 31
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Web page: http://128.118.178.162

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References

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  1. Neary, J Peter, 1978. "Short-Run Capital Specificity and the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 88(351), pages 488-510, September.
  2. Bala, Venkatesh & Van Long, Ngo, 2005. "International trade and cultural diversity with preference selection," European Journal of Political Economy, Elsevier, vol. 21(1), pages 143-162, March.
  3. Thurow, Lester C, 1978. "Psychic Income: Useful or Useless?," American Economic Review, American Economic Association, vol. 68(2), pages 142-45, May.
  4. Throsby,David, 2000. "Economics and Culture," Cambridge Books, Cambridge University Press, number 9780521584067, December.
  5. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S95-S126, December.
  6. Francois, Patrick & van Ypersele, Tanguy, 2002. "On the protection of cultural goods," Journal of International Economics, Elsevier, vol. 56(2), pages 359-369, March.
  7. Eckhard Janeba, 2004. "International Trade and Cultural Identity," NBER Working Papers 10426, National Bureau of Economic Research, Inc.
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Cited by:
  1. Joshua Aizenman & Eileen L. Brooks, 2005. "Globalization and Taste Convergence: The Case of Wine and Beer," NBER Working Papers 11228, National Bureau of Economic Research, Inc.
  2. Janeba, Eckhard, 2007. "International trade and consumption network externalities," European Economic Review, Elsevier, vol. 51(4), pages 781-803, May.
  3. Bala, Venkatesh & Van Long, Ngo, 2005. "International trade and cultural diversity with preference selection," European Journal of Political Economy, Elsevier, vol. 21(1), pages 143-162, March.

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