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Income distribution and unequal gains from trade.
- Source :
- World Economy; Jan2023, Vol. 46 Issue 1, p236-255, 20p, 1 Diagram
- Publication Year :
- 2023
-
Abstract
- This paper studies welfare gains from trade in a tractable model with a nonhomothetic preference over product quality. We show that the welfare changes due to trade shocks are unequal across consumers and derive a parsimonious formula to measure these welfare changes as in Arkolakis et al. (2012, American Economic Review, 102, 94–130). We find that the welfare changes are larger for consumers with lower income. Moreover, this paper shows that the welfare implications are different between a change in (iceberg‐type) variable trade cost and a change in tariff when tariff revenue matters. More importantly, we show that the difference varies across consumers with different income levels. [ABSTRACT FROM AUTHOR]
- Subjects :
- INCOME distribution
INCOME
VARIABLE costs
CONSUMERS
PRODUCT quality
TARIFF
Subjects
Details
- Language :
- English
- ISSN :
- 03785920
- Volume :
- 46
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- World Economy
- Publication Type :
- Academic Journal
- Accession number :
- 161214490
- Full Text :
- https://doi.org/10.1111/twec.13271