An empirical assessment of the welfare effects of reciprocal dumping
نویسندگان
چکیده
Can two-way trade in similar products lead to lower welfare than if such trade was banned? Theory answers yes. To empirically investigate this proposition we examine Swedish imports of bottled water. Assuming one-shot (Bertrand and Cournot) competition, we can use the estimates from a structural model of demand to uncover marginal costs. We simulate the effect on consumer and producer surplus of banning imports. We do not find convincing evidence that banning imports would increase overall welfare. Given our choice of market this suggests we should not be overly concerned with the welfare effects of two-way trade in consumer goods that are close to homogenous. D 2005 Elsevier B.V. All rights reserved.
منابع مشابه
Innovation and Trade with Heterogeneous Firms
This paper examines how trade liberalization affects the innovation incentives of firms, and what this implies for industry productivity and social welfare. For this purpose we develop a reciprocal dumping model of international trade with heterogeneous firms and endogenous R&D. We identify two effects of trade liberalization on productivity: a direct effect through changes in R&D investment, a...
متن کاملDevelopment of An Integrated Mathematical Model to Optimize Waste Rock dumping Satisfying Environmental Aspects
Waste rock dumping is very important in the production planning of open-pit mines. This subject is more crucial when there is a potential of acid-forming (PAF) by waste rocks. In such a type of mines, to protect the environment, the PAF materials should be encapsulated by non-harmful rocks. Therefore, block sequencing of the mined materials should be in such a way that both the environmental an...
متن کاملAn Empirical Assessment of the Monetary Approach to Endogenous Technical Progress Theory: DSGE approach
Economis growth is one of the main factors for evaluating the performance of governments. Economic growth itself is influenced by other factors that have been addressed in growth theories. Among the factors examined in growth theories, technical progress is of particular importance due to its long-term effects on growth. In recent growth models, the technological progress considered an endogeno...
متن کاملHow the WTO Could Be Improved
AbstractThis paper examines the impasse in the current Doha Development Round negotiations andasks how the rules of the WTO could be changed to facilitate multilateral negotiations andto increase the welfare of the Member countries. It considers possible changes to the methodof negotiation. As examples of rules which are outdated, it considers the rules relating toregional trade agreements and ...
متن کاملIssn 1471-0498 Department of Economics Discussion Paper Series Together at Last: Trade Costs, Demand Structure, and Welfare
We show that relaxing the assumption of CES preferences in monopolistic competition has surprising implications when trade is restricted. Integrated and segmented markets behave differently, the latter typically exhibiting reciprocal dumping. Globalization and lower trade costs have different effects: the former reduces spending on all existing varieties, the latter switches spending from home ...
متن کامل