The Elusive Pro-Competitive Effects of Trade / Costas Arkolakis, Arnaud Costinot, Dave Donaldson, Andrés Rodríguez-Clare.

Format:

Book

Author/Creator:

Arkolakis, Costas.

Contributor:

National Bureau of Economic Research.

Costinot, Arnaud.

Donaldson, Dave.

Rodríguez-Clare, Andrés.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21370.

NBER working paper series no. w21370

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

We study the gains from trade liberalization in models with monopolistic competition, firm-level heterogeneity, and variable markups. For a large class of demand functions used in the international macro and trade literature, we derive a parsimonious generalization of the welfare formula in Arkolakis, Costinot, and Rodríguez-Clare (2012). We then use micro-level trade data to quantify the implications of this new formula. Our main finding is that gains from trade liberalization predicted by models with variable markups are slightly lower than those predicted by models with constant markups. In this sense, pro-competitive effects of trade are elusive.

Notes:

Print version record

July 2015.