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Cultural Effects of Trade Liberalization

Author

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  • Steven M. Suranovic

    (The George Washington University)

  • Robert Winthrop

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

Abstract

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.

Suggested Citation

  • Steven M. Suranovic & Robert Winthrop, 2005. "Cultural Effects of Trade Liberalization," International Trade 0511003, EconWPA.
  • Handle: RePEc:wpa:wuwpit:0511003
    Note: Type of Document - pdf; pages: 31
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    References listed on IDEAS

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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:mes:jeciss:v:28:y:1994:i:3:p:877-883 is not listed on IDEAS
    3. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
    4. 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.
    5. Eckhard Janeba, 2004. "International Trade and Cultural Identity," NBER Working Papers 10426, National Bureau of Economic Research, Inc.
    6. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
    7. Thurow, Lester C, 1978. "Psychic Income: Useful or Useless?," American Economic Review, American Economic Association, vol. 68(2), pages 142-145, May.
    8. Francois, Patrick & van Ypersele, Tanguy, 2002. "On the protection of cultural goods," Journal of International Economics, Elsevier, vol. 56(2), pages 359-369, March.
    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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    Cited by:

    1. Joshua Aizenman & Eileen Brooks, 2008. "Globalization and Taste Convergence: the Cases of Wine and Beer," Review of International Economics, Wiley Blackwell, vol. 16(2), pages 217-233, May.
    2. 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.
    3. Günther G. Schulze, 2011. "International Trade," Chapters,in: A Handbook of Cultural Economics, Second Edition, chapter 33 Edward Elgar Publishing.
      • Günther G. Schulze, 2003. "International trade," Chapters,in: A Handbook of Cultural Economics, chapter 34 Edward Elgar Publishing.
    4. Janeba, Eckhard, 2007. "International trade and consumption network externalities," European Economic Review, Elsevier, vol. 51(4), pages 781-803, May.

    More about this item

    Keywords

    Cigarettes; smoking; addiction; Behavioral economics;

    JEL classification:

    • F1 - International Economics - - Trade
    • Z1 - Other Special Topics - - Cultural Economics
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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