International trade and retailing

Eckel, Carsten (2009): International trade and retailing. CESifo Working Paper,

Abstract

The New Trade Theory predicts that international trade lowers prices for consumers and expands the choices available to them. This study shows that both predictions may no longer hold once adjustments in the retail sector are taken into account. I present a new model of retailing in general equilibrium and explore its implications for a number of different shocks. The results demonstrate that retail assortments may remain constant if consumers have a low preference for diversity, and that consumer prices can even rise if the retail density is sufficiently low.

• Item Type: Paper
• Faculties: Economics; Economics > Chairs > Seminar for International Trade Theory and Trade Policy
• Subjects: 300 Social sciences > 330 Economics
• Language: English