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Why are losses from trade unlikely?

Accepted version
Peer-reviewed

Type

Article

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Authors

Gorn, A 
Kokovin, S 
Zhelobodko, E 

Abstract

© 2015. Examining a standard monopolistic competition model with unspecified utility/cost functions, we find necessary and sufficient conditions on their elasticities for welfare losses to arise from trade or market expansion. Two numerical examples explain the losses (under unrealistic elasticities).

Description

Keywords

Market distortions, Trade gains, Variable markups, Demand elasticity

Journal Title

Economics Letters

Conference Name

Journal ISSN

0165-1765
1873-7374

Volume Title

129

Publisher

Elsevier BV