Trade policy and redistribution when preferences are non-homothetic

Offshoring and North-South Trade with Non-homothetic Preferences∗

This paper examines the effect of offshoring in a model of North-South trade when households have non-homothetic preferences of the Matsuyama (2000) type. We presents a platform from which to examine issues of trade and development in the presence of offshoring. The assumption of homotheticity is prevalent throughout the offshoring literature. We find that in equilibrium the South will consume ...

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 ...

Are EU non - reciprocal trade preferences passé ?

Trade , Non - Homothetic Preferences , and the Impact of Country Size on Wages ∗

We study the impact of country size on wages in a two-country trade model with monopolistic competition and non-homothetic preferences. Since there is renewed interest in nonhomothetic preferences and variable markups, we revisit standard results on wages obtained using homothetic (CES) preferences. The standard results are that, under free trade, wages are equal and that, with iceberg costs, t...

Logarithmic quasi-homothetic preferences

We study a class of symmetric, quasi-homothetic preferences that result in demands logarithmic in own prices when these have a negligible impact on aggregate price indices (as in monopolistic competition models). Thus marginal revenues are computationally friendly, and decreasing whenever demands are elastic. Preferences can be represented either by an additive negative exponential direct utili...