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Cultural Effects of Trade Liberalization

  • Steven M. Suranovic

    (The George Washington University)

  • Robert Winthrop

    (Bureau of Land Management, US Dept. of Interior)

We incorporate culture into a standard trade model in two distinct ways. In the ¡°cultural affinity from work¡± model, workers receive a non- pecuniary cultural benefit from work in a particular industry. In the ¡°cultural externality¡± model, consumers of a product receive utility from other consumer¡¯s consumption of a domestic good. We show that resistance to change due to cultural concerns can reduce the national benefits from trade liberalization. Complete movements to free trade will have a positive national welfare impact in the cultural affinity case whereas it may lower national welfare in the cultural externality case. We also show that a loss of cultural benefits is more likely to occur in the externality model.

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File URL: http://128.118.178.162/eps/it/papers/0511/0511003.pdf
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Paper provided by EconWPA in its series International Trade with number 0511003.

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Length: 31 pages
Date of creation: 08 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0511003
Note: Type of Document - pdf; pages: 31
Contact details of provider: Web page: http://128.118.178.162

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  1. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
  2. repec:cup:cbooks:9780521586399 is not listed on IDEAS
  3. Bala, Venkatesh & Van Long, Ngo, 2005. "International trade and cultural diversity with preference selection," European Journal of Political Economy, Elsevier, vol. 21(1), pages 143-162, March.
  4. Eckhard Janeba, 2004. "International Trade and Cultural Identity," NBER Working Papers 10426, National Bureau of Economic Research, Inc.
  5. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S95-S126, December.
  6. Francois, Patrick & van Ypersele, Tanguy, 2002. "On the protection of cultural goods," Journal of International Economics, Elsevier, vol. 56(2), pages 359-369, March.
  7. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57, May.
  8. Thurow, Lester C, 1978. "Psychic Income: Useful or Useless?," American Economic Review, American Economic Association, vol. 68(2), pages 142-45, May.
  9. Neary, J Peter, 1978. "Short-Run Capital Specificity and the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 88(351), pages 488-510, September.
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