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Generalized Welfare Gains from Trade Formulas

Author

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  • Wisarut Suwanprasert

Abstract

This paper develops a novel approach to derive welfare gains from trade formulas applicable to a wide range of trade models. First, I derive a general formula for classical trade models based on the formula established by Arkolakis et al. (2012), henceforth referred to as “ACR.†This new formula incorporates a nuanced consideration of the production share and elasticity of substitution between outputs, offering a refined formula for assessing the welfare gains associated with movements along the production possibility frontier. Second, I use this new approach to generalize the ACR formula. This new derivation broadens the applicability of the ACR formula, extending its relevance to a broader class of trade models than previously considered.

Suggested Citation

  • Wisarut Suwanprasert, 2024. "Generalized Welfare Gains from Trade Formulas," PIER Discussion Papers 214, Puey Ungphakorn Institute for Economic Research.
    • Handle: RePEc:pui:dpaper:214
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    More about this item

    Keywords

    Trade theory; Gains from trade; Classical trade models; ACR formula;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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