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What insights can be gained from bringing the theory of the firm to the global economy? I discuss several new features … of the world economy that can be explained by incorporating the theory of the firm into the theory of international trade …
Persistent link: https://www.econbiz.de/10013071383
We show that, even with flexible domestic wages, international outsourcing may worsen the welfare of the home country and reduce the profits of all firms. If wages are rigid, outsourcing is welfare-improving if and only if the sum of the quot;trade creationquot; effect and the quot;exploitation...
Persistent link: https://www.econbiz.de/10012776626
We review and interpret the main theoretical developments in the gravity literature from its very early, a-theoretical applications to the latest structural contributions. We also discuss challenges and implement methods to estimate empirical gravity equations. We finish with a presentation and...
Persistent link: https://www.econbiz.de/10012960473
Previous empirical research has assumed that goods trade responds to goods trade preferentialism only, while other forms of preferentialism – such as services trade or investment preferentialism – are irrelevant for goods trade. This paper provides novel evidence for the gains from a broader...
Persistent link: https://www.econbiz.de/10013082621
This paper presents a new model of oligopoly in general equilibrium and explores its implications for positive and normative aspects of international trade. Assuming “continuum-Pollak” preferences, the model allows for consistent aggregation over a continuum of sectors, in each of which a...
Persistent link: https://www.econbiz.de/10013000218
We develop a dynamic model of intermediate goods trade in which the pattern and the extent of intermediate goods trade are endogenous. We consider a small open economy whose final good production employs an endogenous array of intermediate goods, from low technology (high cost) to high...
Persistent link: https://www.econbiz.de/10013001169
Germany exhibits a strong reduction in domestic manufacturing production depth (bazaar effect). I argue that this reflects an unbundling of comparative advantage. Using a model where Ricardian plus Heckscher-Ohlin-type comparative advantage relates to fragments of production, I compare a trading...
Persistent link: https://www.econbiz.de/10012777491
Credit rationing in the presence of asset inequality affects production and trade pattern in this paper, but not in the conventional way. A Ricardian general equilibrium framework with heterogeneous levels of asset ownership is developed to show that more equal asset distribution may contract...
Persistent link: https://www.econbiz.de/10012962668
theory, which indicates that increases in firms' export size change the buyer's and seller's preferences over currency …
Persistent link: https://www.econbiz.de/10013011644
One of the oldest and largest literatures in empirical economics is concerned with the estimation of demand and supply of goods, services, and factors across national or subnational borders (see Leamer and Levinsohn, 1995). The respective empirical models specified and estimated are often...
Persistent link: https://www.econbiz.de/10013058498