Purpose – The purpose of this paper is to develop a tractable general-equilibrium model, where the market is mixed of large firms (oligopoly) and small firms (monopolistic competition). We will provide new implication of trade gain.Design/Methodology/Approach – Our discussion relies on...

This paper investigates the interplay of trade and terrorism externalities under free trade between a developed nation that exports a manufactured good to and imports a primary product from a developing nation. A terrorist organization targets both nations and reduces its attacks in response to...