International Trade and Retailing

Carsten Eckel

No 2597, CESifo Working Paper Series from CESifo

Abstract: The New Trade Theory predicts that international trade lowers prices for consumers and expands the choices available to them. This study shows that both predictions may no longer hold once adjustments in the retail sector are taken into account. I present a new model of retailing in general equilibrium and explore its implications for a number of different shocks. The results demonstrate that retail assortments may remain constant if consumers have a low preference for diversity, and that consumer prices can even rise if the retail density is sufficiently low.

Keywords: international trade; retailing; diversity; market structure; welfare; monopolistic competition (search for similar items in EconPapers)
JEL-codes: F12 L11 L81 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Working Paper: International trade and retailing (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2597

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