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Gains from Trade and the Sovereign Bond Market

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  • Ayumu Ken Kikkawa
  • Akira Sasahara

Abstract

Increasing international flows of goods, services, and financial assets have been shown to increase a country's welfare through various channels. This paper studies the interaction between a country's welfare gains from international trade and its sovereign’s access to bond markets. We do so by incorporating a sovereign bond market into a simple Armington (1969) trade model. While standard trade models suggest surprisingly small gains from trade, our model implies that introducing channels through a sovereign bond market greatly magnifies the gains from trade.

Suggested Citation

  • Ayumu Ken Kikkawa & Akira Sasahara, 2018. "Gains from Trade and the Sovereign Bond Market," EconStor Preprints 190820, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:190820
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    2. Charles Serfaty, 2022. "Sovereign Debt and International Trade," Working papers 901, Banque de France.

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    More about this item

    Keywords

    Gains from trade; Sovereign debt; Sovereign default; Trade openness;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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