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Measurable Dynamic Gains from Trade

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  • Baldwin, Richard E

Abstract

Productive factors, such as human and physical capital, accumulate and trade policy can affect their steady-state levels. Consequently, in addition to the usual static effects, trade liberalization has dynamic effects on output and welfare as the economy moves to its new steady state. The output impact of this dynamic effect is also measurable. The size of this dynamic gain from trade depends on the wedge between social and private returns to capital. Rough numerical estimates of the output and welfare effects are provided. Copyright 1992 by University of Chicago Press.

Suggested Citation

  • Baldwin, Richard E, 1992. "Measurable Dynamic Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 162-174, February.
  • Handle: RePEc:ucp:jpolec:v:100:y:1992:i:1:p:162-74
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    References listed on IDEAS

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    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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