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Exploring the Links Between Transaction Costs, income Distribution and Economic Performance in a Case Study for Colombia

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  • Maurizio Bussolo
  • John Whalley

Abstract

Standard international trade models have consistently produced results that, compared ex post with real world data, show the right sign but much smaller magnitudes. Besides, for the case of developing countries, these same models predict that unskilled labour would gain from liberalization, and this too contrasts with empirical evidence. This paper proposes a new approach by considering transaction costs reductions as an important factor explaining developing countries' actual performances.

Suggested Citation

  • Maurizio Bussolo & John Whalley, 2003. "Exploring the Links Between Transaction Costs, income Distribution and Economic Performance in a Case Study for Colombia," Economie Internationale, CEPII research center, issue 94-95, pages 235-260.
  • Handle: RePEc:cii:cepiei:2003-2q-3qj
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    Keywords

    International Trade; Transaction Costs; Simulation Models; Income Distribution;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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