Goods Trade, Factor Mobility and Welfare

Stephen Redding

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper extends a recent class of quantitative models of international trade to incorporate factor mobility within countries. We present a model-based decomposition of the variance of economic activity into the contributions of locational fundamentals, market access and their covariance. We show how the standard framework for undertaking model-based counterfactuals in trade can be augmented to obtain predictions for endogenous changes in the distribution of economic activity across regions within countries. A region's trade share with itself is no longer a sufficient statistic for the welfare gains from trade, which also depend on endogenous changes in the distribution of mobile factors.

Keywords: International trade; factor mobility; welfare gains from trade (search for similar items in EconPapers)
JEL-codes: F11 F12 F16 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (53)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/dp1140.pdf (application/pdf)

Related works:
Journal Article: Goods trade, factor mobility and welfare (2016)
Working Paper: Goods trade, factor mobility and welfare (2012)
Working Paper: Goods Trade, Factor Mobility and Welfare (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1140

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().