An adverse social welfare effect of a doubly gainful trade
Wilhelm Kohler and
No 273147, Discussion Papers from University of Bonn, Center for Development Research (ZEF)
Acknowledging individuals’ distaste for low relative income renders trade less appealing when trade is viewed as a technology that integrates economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are overtaken by losses of relative income, with the result that global social welfare is reduced. A constructive example reveals that a “trembling trade” can arise even when trade is doubly gainful in that it increases the income of every individual and narrows the income gap between the trading populations.
Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
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Journal Article: An adverse social welfare effect of a doubly gainful trade (2018)
Working Paper: An adverse social welfare effect of a doubly gainful trade (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ubzefd:273147
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