Unilateral trade liberalization in the melitz model: A note

Felbermayr, Gabriel und Jung, Benjamin (2012): Unilateral trade liberalization in the melitz model: A note. In: Economics Bulletin, Vol. 32, No. 2: pp. 1724-1730

Abstract

In the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector, We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs.

• Item Type: Journal article
• Faculties: Economics; Economics > Chairs > CESifo-Professorship for International Trade
• Subjects: 300 Social sciences > 330 Economics
• Language: English