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Trade, product variety and welfare: a quantitative assessment for mainland China

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  • Michael Funke
  • Ralf Ruhwedel

Abstract

We calculate a variety of welfare gains for Mainland China, following the approach of Romer (1994), who emphasized that proper modelling of the impact of trade restrictions on the number of available product varieties is crucial for quantifying the welfare impact of trade liberalization. The empirical work presented relies on direct measures of product variety calculated from highly disaggregated trade data. The emerging conclusion is that freer trade has indeed boosted welfare.

Suggested Citation

  • Michael Funke & Ralf Ruhwedel, 2008. "Trade, product variety and welfare: a quantitative assessment for mainland China," China Economic Journal, Taylor & Francis Journals, vol. 1(2), pages 203-212.
    • Handle: RePEc:taf:rcejxx:v:1:y:2008:i:2:p:203-212
    DOI: 10.1080/17538960802076695
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    2. Marta Arespa, 2013. "The intensive and the extensive margins: not only an international issue," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 12(1), pages 1-34, April.

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