EconPapers    
Economics at your fingertips  
 

Firm heterogeneity, comparative advantage and the transfer problem

Federico Trionfetti

European Economic Review, 2018, vol. 108, issue C, 246-258

Abstract: This paper studies the transfer problem in a model featuring comparative advantage, monopolistic competition, trade costs, and firm heterogeneity in factor intensity. The results are very different from those of the previous literature. First, a transfer creates a secondary burden in situations where the neoclassical version of the Heckscher–Ohlin model would not. Second, a transfer affects wage inequality. Third, a transfer is not neutral to world welfare. Fourth, floating exchange rates do not substitute for deflation. Fifth, a simulation exercise shows that the quantitative effects of trade imbalances are comparable in magnitude to those arising from major trade agreements.

Keywords: Productivity effects of transfers; Welfare effects of transfers (search for similar items in EconPapers)
JEL-codes: F11 F12 F41 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0014292118301132
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Firm heterogeneity, comparative advantage and the transfer problem (2018) Downloads
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:eee:eecrev:v:108:y:2018:i:c:p:246-258

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-08-20
Handle: RePEc:eee:eecrev:v:108:y:2018:i:c:p:246-258