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Neckties in the tropics: a model of international trade and cultural diversity

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  • James E. Rauch
  • Vitor Trindade

Abstract

Some cultural goods are consumed socially and are characterized by the same consumption network externalities as languages. Also, producers of new cultural goods in any one country draw on the stock of ideas generated by previous cultural production in all countries. For such goods, costless trade and communication tend to lead to the dominance of one cultural style, increasing utility in the short run but reducing quality and welfare in the long run. Increasing protection while keeping communication costs low may stimulate production of cultural goods that are `compatible' with the dominant style, adding little to the stock of usable ideas.

Suggested Citation

  • James E. Rauch & Vitor Trindade, 2009. "Neckties in the tropics: a model of international trade and cultural diversity," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 809-843, August.
  • Handle: RePEc:cje:issued:v:42:y:2009:i:3:p:809-843
    DOI: 10.1111/j.1540-5982.2009.01528.x
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    1. James E. Rauch & Vitor Trindade, 2009. "Neckties in the tropics: a model of international trade and cultural diversity," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(3), pages 809-843, August.
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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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