Intermediated Trade
Pol Antras and
Arnaud Costinot
The Quarterly Journal of Economics, 2011, vol. 126, issue 3, 1319-1374
Abstract:
This paper develops a simple model of international trade with intermediation. We consider an economy with two islands and two types of agents, farmers and traders. Farmers can produce two goods, but to sell these goods in centralized (Walrasian) markets, they need to be matched with a trader, and this entails costly search. In the absence of search frictions, our model reduces to a standard Ricardian model of trade. We use this simple model to contrast the implications of changes in the integration of Walrasian markets, which allow traders from different islands to exchange their goods, and changes in the access to these Walrasian markets, which allow farmers to trade with traders from different islands. We find that intermediation always magnifies the gains from trade under the former type of integration, but leads to more nuanced welfare results under the latter, including the possibility of aggregate losses. Copyright 2011, Oxford University Press.
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (100)
Downloads: (external link)
http://hdl.handle.net/10.1093/qje/qjr019 (application/pdf)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Intermediated Trade (2011) 
Working Paper: Intermediated Trade (2010) 
Working Paper: Intermediated Trade (2010) 
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:oup:qjecon:v:126:y:2011:i:3:p:1319-1374
Ordering information: This journal article can be ordered from
https://academic.oup.com/journals
Access Statistics for this article
The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva
More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().