Efficient barriers to trade: A sequential trade model with heterogeneous agents

Informationally Efficient Trade Barriers∗

Why are trade barriers often used to protect home producers, even at the cost of introducing deadweight losses from higher commodity prices? We add an informational friction to the standard textbook argument in favor of free trade, and show that trade restrictions may be a more efficient policy than a lump sum transfer to the displaced producers. Trade barriers, while generating deadweight loss...

Trade in Services: Does Gravity Hold? A Gravity Model Approach to Estimating Barriers to Services Trade

This paper assesses the determinants of trade in services using a gravity model, with particular attention given to the role of barriers to services trade. Initially, the application of the gravity equation to services trade is examined. A variety of econometric estimators are tested and the Hausman-Taylor model is found to be the best estimator. The gravity model fits services trade flows in a...

Trade with Heterogeneous Beliefs1

The paper analyzes an economy with asymmetric information in which agents trade in contingent assets. The new feature in the model is that each agent may have any prior belief on the states of nature and thus the posterior belief of an agent maybe any probability distribution that is consistent with his private information. The main result is that the set of equilibrium prices of the assets at ...

International trade in a model with heterogeneous trade costs, parallel imports and non-homothetic preferences∗

I incorporate heterogeneous trade costs into the model of Foellmi, Hepenstrick, and Zweimüller (2013) to analyze another reason for export zeros, additional to arbitrage constraints resulting from per capita income differences. In my model, high trade costs may be responsible for export zeros. The level of tariffs and transportation costs are crucial for patterns of international trade. I find ...

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