Decomposing the gains from trade in the presence of time-consuming consumption

Binh Tran-Nam

International Journal of Development and Conflict, 2017, vol. 7, issue 1, 1-11

Abstract: We examine the decomposition of the gains from trade when consumption is time consuming in a simple open economy setting. While trade remains welfare improving, the sources of trade gainfulness differ from those in conventional trade models. In particular, the conventionally defined exchange (consumption) and specialisation (production) gains vanish. There are, however, positive gains from time reallocation (away from production toward consumption) and specialisation associated with this time reallocation.

Keywords: Gossen; Becker; Consumption time constraint; Gains from trade; Time reallocation (search for similar items in EconPapers)
JEL-codes: D11 F10 F11 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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