Intersectoral distortions and the welfare gains from trade

• 成果类型: Article
• 署名作者: Swiecki, Tomasz
• 署名单位: University of British Columbia
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.10.011
• 发表日期: 2017
• 页码: 138-156
• 关键词: Gains from trade; Labor distortions; Optimal tariffs

摘要

Howlarge are the welfare gains from trade when factors are misallocated due to domestic distortions? In this paper I provide a theoretical and a quantitative answer to this question by incorporating distortions to the allocation of labor across sectors into a Ricardian trade model. Applying the model to data for a diverse set of countries I find that (1) gains from trade for net exporters in sectors with low marginal product of labor are overstated in models that abstract from intersectoral distortions since in those countries trade tends to exacerbate the effect of domestic frictions; (2) the gains from implementing optimal tariffs are substantial in the presence of domestic frictions because trade policy can offset some of their negative effect; and (3), mitigating domestic frictions has a much larger potential payoff for countries when they are open to international trade. (C) 2016 Elsevier B.V. All rights reserved.