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

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  • Ralf Ruhwedel
  • Michael Funke

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

  • Ralf Ruhwedel & Michael Funke, 2008. "Trade, product variety and welfare: a quantitative assessment for mainland China," Quantitative Macroeconomics Working Papers 20806, Hamburg University, Department of Economics.
    • Handle: RePEc:ham:qmwops:20806
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    References listed on IDEAS

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    1. Broda, Christian & Greenfield, Joshua & Weinstein, David E., 2017. "From groundnuts to globalization: A structural estimate of trade and growth," Research in Economics, Elsevier, vol. 71(4), pages 759-783.
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    Cited by:

    1. 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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    Keywords

    trade liberalization; product variety; welfare; China;
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