Technology, market structure and the gains from trade

Market Imperfections, Wealth Inequality, and the Distribution of Trade Gains

We explore the role of the ownership structure of capital in an economy that suffers from barriers to entry and an imperfect financial system. In such an environment, an unequal distribution of capital provides an explanation for trade flows and trade gains even when countries do not differ in relative factor endowments or available technologies. Moreover, an uneven asset distribution is associ...

Volatility, Insurance, and the Gains from Trade∗

By reducing the negative correlation between local prices and productivity shocks, trade liberalization changes the volatility of returns. In the context of agriculture in developing countries—where production is risky, producers are risk averse, and insurance markets are incomplete—this change in volatility may have large welfare effects. In this paper, we empirically, analytically, and quanti...

Transboundary Pollution and the Gains from Trade

We analyse the effects of transboundary pollution on trade patterns and welfare in a general equilibrium trade model. Production in a dirty industry generates pollution that negatively effects productivity, both at home and abroad, in a clean industry. Trade may lead to the spatial separation of production but the existence of transboundary pollution can offset the benefits from specialization....

European Integration and the Gains from Trade

This chapter discusses whether and how 'new quantitative trade models' (NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further European integration. On the one hand, it argues that NQTMs have indeed the potential of being used to supplement traditional ‘computable general equilibrium’ (CGE) analysis t...

Money and the Gains from Trade