Strategic Trade Policy and the Home Bias in Firm Ownership Structure by Steffen Huck and Kai A. Konrad In this note we consider the preferences of a profit maximizing firm for international ownership in a world in which firms compete in an international Cournot oligopoly, and in which countries use strategic trade policy. We find that firms prefer national ownership and show that full indigenis...

How do domestic political institutions affect the outcomes of international trade negotiations? Specifically, are the aggregate trade barriers agreed upon by a democratic pair lower than those by a pair composed of a democracy and an autocracy? I revisit these important questions by highlighting some problematic aspect of the analysis by Mansfield, Milner, and Rosendorff (2000). Contrary to the...

We develop a quantitative spatial model that incorporates a rich geography of trade costs and labor mobility with heterogeneous worker preferences across locations. We provide comparative statics for the unique equilibrium with respect to the primitives of the model. We show how the model can be used to undertake counterfactuals using only data in an initial equilibrium. In these counterfactual...

In the light of endeavours for a Global System of Trade Preferences (GSTP) among developing countries, this article is concerned with the extent and structure of trade control measures in developing countries against imports of manufactures. More specifically, tariff charges, specific tariffs and quantitative restrictions are examined in selected developing countries. The analysis suggests that...

This paper investigates the interlinkage in the business cycles of large-country economies in a free-trade equilibrium. We consider a two-country, two-good, two-factor general equilibrium model with Cobb-Douglas technologies and linear preferences. We also assume decreasing returns in both sectors. We first identify the determinants of each country’s accumulation pattern in autarky equilibrium,...

Conventional two-country RBC models interpret countercyclical net exports as reflecting, in large part, the dynamics of capital. I show that, quantitatively, theoretical economies rely on counterfactual terms of trade effects: trade fluctuations, on the contrary, are driven primarily by consumption smoothing, thus generating procyclical net trade in goods. I then consider a class of preferences...

We introduce habit formation in a model that studies the link between international trade in financial assets, economic growth, and welfare. As with time separable preferences asset trade increases the mean growth rate, but it also increases growth-volatility. We demonstrate that the welfare gain from asset trade is lower with habit persistence in consumption. This reflects that the habit-formi...

We suppose that there are two countries trading two commodities, country 1 exporting commodity 1 to country 2, and that country 1 imposes a tariff on its import of commodity 2 while country 2 remains passive and does not retaliate. We assume that preferences in country 1 are identical and homothetic. A classic theorem, going back to Mill (1844), Torrens (1844), and Bickerdike (1907), states tha...

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 ...

Studies on mate preferences have demonstrated that women’s perception of male attractiveness is sensitive to men’s facial masculinity, and that women’s preferences for facial masculinity are subject to individual differences, such as own condition. These individual differences have been linked to potential tradeoffs that women face given the hypothesized benefits and costs that masculinity may ...