Global imbalances revisited: The transfer problem and transport costs in monopolistic competition

• 成果类型: Article
• 署名作者: Epifani, Paolo; Gancia, Gino
• 署名单位: University of Nottingham Ningbo China; Centre de Recerca en Economia Internacional (CREI); Barcelona School of Economics
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2017.05.010
• 发表日期: 2017
• 页码: 99-116
• 关键词: Trade imbalances; Trade costs; monopolistic competition; Intermediate goods

摘要

We study the welfare effects of trade imbalances in a two-sector model of monopolistic competition. As in perfect competition, a trade surplus involves an income transfer to the deficit country and possibly a terms-of-trade deterioration. Unlike the conventional wisdom, however, trade imbalances do not impose any double burden on surplus countries. This is because of a production-delocation effect, which leads to a reduction in the local price index. In the presence of intermediate goods, new results arise: A trade surplus may lead to an appreciation of the exchange rate, to a terms-of-trade improvement and even to a welfare increase. Numerical simulations show that, under realistic assumptions about preferences and technology, the beneficial price-index effect can significantly reduce the direct cost of the transfer. (C) 2017 Elsevier B.V. All rights reserved.