Year: 2006
Type: report
Abstract: This paper examines the impact of trade liberalization with heterogeneous firms using the Melitz (2003) model.We find a number of novel results and effects including a Stolper-Samuelson like result and several results related to the volume of trade, which are empirically testable.We also find what might be called an anti-variety effect as the result of trade liberalization.This resonates with the often voiced criticism from antiglobalists that globalization leads the world to become more homogenous by eliminating local specialities.Nevertheless, we find that trade liberalization always leads to welfare gains in the model.
DOI: 10.3386/w12192
Authors: Richard Baldwin, Rikard Forslid
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3022014300