Unilateral trade liberalization in the Melitz model: A note
AbstractIn the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector. We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs. --
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Bibliographic InfoPaper provided by University of Tuebingen, Faculty of Economics and Social Sciences in its series University of Tuebingen Working Papers in Economics and Finance with number 30.
Date of creation: 2012
Date of revision:
monopolistic competition; heterogeneous firms; international trade; trade policy;
Other versions of this item:
- Gabriel Felbermayr & Benjamin Jung, 2012. "Unilateral Trade Liberalization in the Melitz Model: A Note," Economics Bulletin, AccessEcon, vol. 32(2), pages 1724-1730.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-14 (All new papers)
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