On the heterogeneous welfare gains and losses from trade

Daniel Carroll and Sewon Hur

Journal of Monetary Economics, 2020, vol. 109, issue C, 1-16

Abstract: How are the gains and losses from trade distributed across households? We document that tradable goods and services constitute a larger fraction of expenditures for low-wealth and low-income households. Using a trade model with nonhomothetic preferences and uninsurable earnings risk, we measure the differential welfare gains from trade along the income and wealth distribution. A permanent reduction in trade costs that generates the rise in import share of GDP seen in the data from 2001 to 2014 leads to 57% larger welfare gains for households in the lowest wealth decile relative to those in the highest wealth decile.

Keywords: Trade gains; Inequality; Consumption (search for similar items in EconPapers)
JEL-codes: E21 F10 F13 F62 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: On the Heterogeneous Welfare Gains and Losses from Trade (2019)
Working Paper: On the Heterogeneous Welfare Gains and Losses from Trade (2019)
Working Paper: On the Heterogeneous Welfare Gains and Losses from Trade (2019)
Working Paper: On the Heterogeneous Welfare Gains and Losses from Trade (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:109:y:2020:i:c:p:1-16

DOI: 10.1016/j.jmoneco.2019.10.009

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