EconPapers    
Economics at your fingertips  
 

Goods-Market Frictions and International Trade

Pawel Krolikowski () and Andrew H. McCallum

No 201635R, Working Papers from Federal Reserve Bank of Cleveland

Abstract: We add goods-market frictions to a general equilibrium dynamic model with heterogeneous exporting producers and identical importing retailers. Our tractable framework leads to endogenously unmatched producers, which attenuate welfare responses to foreign shocks but increase the trade elasticity relative to a model without search costs. Search frictions are quantitatively important in our calibration, attenuating welfare responses to tariffs by 40 percent and increasing the trade elasticity by 50 percent. Eliminating search costs raises welfare by 1 percent and increasing them by only a few dollars has the same effects on welfare and trade flows as a 10 percent tariff.

Keywords: Trade; Frictions (search for similar items in EconPapers)
JEL-codes: D83 F12 (search for similar items in EconPapers)
Pages: 113 pages
Date: 2016-12-23
Note: Revision of Working Paper 16-35 originally published in December of 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.26509/frbc-wp-201635r Full text (text/html)

Related works:
Working Paper: Goods-Market Frictions and International Trade (2020) Downloads
Working Paper: Goods-Market Frictions and International Trade (2019) Downloads
Working Paper: Goods-Market Frictions and International Trade (2017) Downloads
Working Paper: Goods-Market Frictions and International Trade (2017) Downloads
Working Paper: Goods-Market Frictions and International Trade (2016) 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:fip:fedcwq:163501

Ordering information: This working paper can be ordered from

DOI: 10.26509/frbc-wp-201635r

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-09-18
Handle: RePEc:fip:fedcwq:163501