On North-South Intra- and Inter-Industry Trade and Welfare

John Gilbert, Hamid Beladi and Reza Oladi

Working Papers from College of Business, University of Texas at San Antonio

Abstract: We consider a general equilibrium model of a developing economy (the South) that trades with a developed economy (the North). The Southern economy is characterized by open urban unemployment and rural-urban migration, and by a monopolistically competitive manufacturing sector. Given a minimum wage that is binding in the South, the developing economy exports agricultural goods, which are produced under competitive conditions in the rural economy, in addition to engaging in intra-industry trade in manufactures. We describe the welfare consequences of simultaneous North-South trade of both the inter- and intra-industry variety.

Keywords: Trade and monopolistic competition; Urban unemployment; North-South trade (search for similar items in EconPapers)
JEL-codes: F12 F13 F16 O18 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2014
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Published in Review of Economics, March 1999, pages 1-23

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Persistent link: https://EconPapers.repec.org/RePEc:tsa:wpaper:0139eco

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