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Intermediation and Economic Integration

  • Costinot, Arnaud
  • Antras, Pol

The theory of international trade has paid scant attention to market institutions. Neither neoclassical theory nor new trade models typically specify the process by which supply and demand meet. Yet in the real world, intermediaries play a central role in materializing the gains from exchange outlined by standard trade theories. In Antràs and Costinot (2010), we have developed a stylized but explicit model of intermediation in trade. In this short paper, we present a variant of this model that illustrates the potential role of intermediaries in facilitating the realization of the gains from trade.

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File URL: http://dash.harvard.edu/bitstream/handle/1/4784026/Antras_Intermediation.pdf
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Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 4784026.

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Date of creation: 2010
Date of revision:
Publication status: Published in The American Economic Review
Handle: RePEc:hrv:faseco:4784026
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  1. Antràs, Pol & Costinot, Arnaud, 2010. "Intermediated Trade," CEPR Discussion Papers 7696, C.E.P.R. Discussion Papers.
  2. Marcel Fafchamps & Ruth Vargas Hill, 2004. "Selling at the farm-gate or travelling to market," CSAE Working Paper Series 2004-30, Centre for the Study of African Economies, University of Oxford.
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