Recent empirical evidence suggests that prices for some goods and services are higher in larger markets. This paper provides a demand-side explanation for this phenomenon when firms can choose how much to differentiate their products in a model of monopolistic competition with horizontal product...

There is strong evidence that different income groups consume different bundles of goods. This evidence suggests that trade liberalization can affect welfare inequality within a country via changes in the relative prices of goods consumed by different income groups (the price effect). In this...

This paper analyzes the effect of trade liberalization on government spending in a general equilibrium model with a continuum of industries supplying tradable and nontradable goods under monopolistic competition. Trade liberalization is modeled as the opening up of product markets between two...

This paper sets up a general oligopolistic equilibrium model with two countries that differ in the centralization of union wage setting. Being interested in the consequences of openness, we show that, in the short-run, trade increases welfare and employment in both locations, and it raises...

As tariffs are increasingly being reduced, trade economists and policymakers have begun to emphasize the importance of reducing non-tariff trade costs to facilitate international trade flows. However, the measurement of trade costs and transport costs, in particular, is not an easy task. For...

Success in international trade depends, amongst other things, on distance from markets. Most new economic geography models focus on the distance between countries. In contrast much less theorizing and empirical analysis have focused on how distances within a country for instance due to the...

The East Asian region is a major global economic player, given its economic size and potential. As such, Regional Economic Integration in East Asia could be considered as an important building bloc toward integration of the Asia-Pacific region. East Asia has made significant progress in creating...