Trade, productivity improvements and welfare: an endogenous market structure framework

Arbeitspapier

In this paper, I investigate the welfare effects that developed countries experience after productivity improvements occur in their emerging trading partners, using a two-country model featuring pro-competitive effects of trade and asymmetries in technology. I model the technology advantage of the developed country, assuming that the productivity distribution its firms draw from stochastically dominates that of the emerging country. Calibrated to match aggregate and firm level statistics of the US economy, the model predicts that the country with better technology has a higher productivity cut-off level, higher average productivity and higher welfare. Productivity improvements in the emerging country generate selection and raise welfare everywhere, with both the selection effect and the positive welfare effect being stronger in the emerging country. Finally, trade liberalization is associated with more selection and higher welfare in both the developed and the emerging country.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: ECB Working Paper ; No. 1624

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Economic Impacts of Globalization: Macroeconomic Impacts ; Technological Change: Choices and Consequences; Diffusion Processes ; General Welfare; Well-Being
• Thema: asymmetric countries ; endogenous market structure ; productivity improvements ; welfare

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Montinari, Letizia
• Ereignis: Veröffentlichung
• (wer): European Central Bank (ECB)
• (wo): Frankfurt a. M.
• (wann): 2013

Weitere Informationen

• Handle: http://hdl.handle.net/10419/154057
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ