Trade Liberalization with Heterogenous Firms

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.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 62 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.