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A Theory of Trade Liberalization and Innovations with Heterogeneous Firms

Rutzer, Christian - 2014

This paper extends the firm heterogeneity model of Melitz (2003) by introducing a new concept of endogenous investments in process R&D. The novelty is that if a firm invests more in R&D its expected innovation return hazard rate stochastically dominates the return of less R&D investments. Due to...

Persistent link: https://www.econbiz.de/10013056968

Merger Policy in a Quantitative Model of International Trade

Breinlich, Holger - 2016

In a two-country international trade model with oligopolistic competition, we study the conditions on market structure and trade costs under which a merger policy designed to benefit domestic consumers is too tough or too lenient from the viewpoint of the foreign country. Calibrating the model...

Persistent link: https://www.econbiz.de/10012988892

Love of variety and gains from trade

Gouel, Christophe; Jean, Sébastien - 2021

This paper shows how gains from trade are conditioned by love of variety, defined as the extent to which an additional … product variety generates benefits in either final or intermediate consumption. We develop a multi-country, multi …-sector gravity trade model where love of variety is parameterized separately from product substitutability using a generalized CES …

Persistent link: https://www.econbiz.de/10012697075

The dynamic and distributional aspects of import tariffs

Lechthaler, Wolfgang; Mileva, Mariya - 2017

We use a dynamic trade model with two sectors and two types of workers to analyze the optimal setting of income-generating tariffs. This approach allows us to take account of adjustment dynamics, distributional aspects and the time horizon of policy makers and workers. In response to a...

Persistent link: https://www.econbiz.de/10011654196

Essays on international trade and development

Heid, Benedikt - 2014

This volume was prepared by Benedikt Heid while he was working at the ifo Institute and the University of Bayreuth. It was completed in December 2013 and accepted as a doctoral thesis by the Department of Economics at the Ludwig-Maximilians-Universität München. It includes six self-contained...

Persistent link: https://www.econbiz.de/10011742960

A simple model of Brexit under oligopoly

Collie, David R. - 2017

The welfare effects of Brexit on the UK, the EU27 and the rest of the world are analysed in a model of international trade under oligopoly. A hard Brexit where the UK trades according to WTO rules is shown to decrease total UK welfare, to have an ambiguous effect on total EU27 welfare, and to...

Persistent link: https://www.econbiz.de/10011867762

Trade Coordination in Free Trade Agreements and Customs Unions

Nahm, Sihoon - 2019

Purpose – This paper explains why free trade agreements (FTAs) are more popular than customs unions (CUs) in respect of tariff coordination. Design/methodology – This paper employs an equilibrium theory of trade agreements with tariff coordination. I set up three-country partial equilibrium...

Persistent link: https://www.econbiz.de/10012862448

Optimal Trade Policy in Vertically Related Markets

Chen, Fang-yueh - 2001

We examine the home country tariff and subsidy policies when a domestic firm uses an imported key input to produce its low-quality exports, and foreign firms produce high-quality exports as well as the key input. We show that the decisions of foreign vertically integrated firms on strategy...

Persistent link: https://www.econbiz.de/10014061922

Foundation of the Small Open Economy Model with Product Differentiation

Caliendo, Lorenzo; Feenstra, Robert C. - National Bureau of Economic Research - 2022

We derive a small open economy (SOE) as the limit of an economy as the number or size of its trading partners goes to infinity and trade costs also go to infinity. We obtain this limit in the Armington, Eaton-Kortum, Krugman, and Melitz models. In all cases, the trade of the SOE with the foreign...

Persistent link: https://www.econbiz.de/10013334441

Trade Policy and Global Sourcing : An Efficiency Rationale for Tariff Escalation

Antràs, Pol; Fort, Teresa C.; Gutierrez, Agustin; … - National Bureau of Economic Research - 2022

Import tariffs tend to be higher for final goods than for inputs, a phenomenon commonly referred to as tariff escalation. Yet neoclassical trade theory - and modern Ricardian trade models, in particular - predict that welfare-maximizing tariffs are uniform across sectors. We show that tariff...

Persistent link: https://www.econbiz.de/10013334443