International trade, migration and investment with horizontal product differentiation and free entry and exit of firms

This paper builds on a circular road model of the world with horizontal product differentiation and free entry and exit of firms, to derive results that can be applied in industrial organization, international trade and political economy. The model shows that freer international trade increases welf...

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Autor Principal: Vallejo González, Hernán Eduardo
Formato: Desconocido (Unknown)
Lenguaje:Inglés (English)
Publicado: Universidad de los Andes, Facultad de Economía, CEDE 2018
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Acceso en línea:http://hdl.handle.net/1992/7971
id ir-1992-7971
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spelling ir-1992-79712020-09-16T20:21:51Z International trade, migration and investment with horizontal product differentiation and free entry and exit of firms Comercio, migración e inversión internacional con diferenciación horizontal de producto y libre entrada y salida de firmas Vallejo González, Hernán Eduardo Monopolistic competition Horizontal product differentiation International trade International migration and foreign direct investment Libre comercio - Modelos econométricos Comercio exterior - Modelos econométricos Competencia económica internacional - Modelos econométricos Inversiones extranjeras - Modelos econométricos Emigración e inmigración - Investigaciones Organización industrial - Investigaciones Economía política - Investigaciones F12, F13 This paper builds on a circular road model of the world with horizontal product differentiation and free entry and exit of firms, to derive results that can be applied in industrial organization, international trade and political economy. The model shows that freer international trade increases welfare -with ideal variety preferencesthrough the exploitation of economies of scale and better allocative efficiency; that all participating countries gain from trade, and that smaller countries have more to win from free trade than larger countries. The model also explains that there may be adjustment costs when liberalizing trade and thus, political resistance to trade liberalization. International migration can also be analyzed with the model, showing the possibility of suboptimal migration flows and political barriers to the exit of national citizens. The model suggests that foreign direct investment will be welfare improving for the source country in the short run, and for the receiving country in the long run. Finally, the model provides a microfoundation for the use of demand curves with constant and negative slopes. Este documento se basa en un modelo de carretera circular del mundo con diferenciación horizontal de producto y libre entrada y salida de firmas, para derivar resultados que pueden ser aplicados en la organización industrial, el comercio internacional y la economía política. El modelo muestra que un comercio internacional más libre aumenta el bienestar -con preferencias de variedad ideal por medio de la explotación de economías de escala y de una mejor asignación de recursos, que todos los países participantes ganan con el comercio, y que los países más pequeños tienen más que ganar del libre comercio que los países grandes. El modelo también explica que puede haber costos de ajuste al liberar el comercio y que por lo tanto, puede haber resistencia política a la liberación del comercio. La migración internacional también puede ser analizada con el modelo, identificando la posibilidad de que haya flujos subóptimos de migración y barreras de política a la salida de ciudadanos nacionales de un país. El modelo sugiere que la inversión extranjera directa mejorará el bienestar del país fuente en el corto plazo, y el bienestar del país receptor en el largo plazo. Finalmente, el modelo provee una microfundamentación para el uso de curvas de demanda con pendientes constantes y negativas. 2018-09-27T16:49:48Z 2018-09-27T16:49:48Z 2005 document publishedVersion 1657-5334 http://hdl.handle.net/1992/7971 1657-7191 eng Documentos CEDE No. 62 Noviembre de 2005 Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores. openAccess Universidad de los Andes, Facultad de Economía, CEDE instname:Universidad de los Andes reponame:Repositorio Institucional Séneca
institution Universidad de los Andes
collection DSpace
language Inglés (English)
topic Monopolistic competition
Horizontal product differentiation
International trade
International migration and foreign direct investment
Libre comercio - Modelos econométricos
Comercio exterior - Modelos econométricos
Competencia económica internacional - Modelos econométricos
Inversiones extranjeras - Modelos econométricos
Emigración e inmigración - Investigaciones
Organización industrial - Investigaciones
Economía política - Investigaciones
F12, F13
spellingShingle Monopolistic competition
Horizontal product differentiation
International trade
International migration and foreign direct investment
Libre comercio - Modelos econométricos
Comercio exterior - Modelos econométricos
Competencia económica internacional - Modelos econométricos
Inversiones extranjeras - Modelos econométricos
Emigración e inmigración - Investigaciones
Organización industrial - Investigaciones
Economía política - Investigaciones
F12, F13
Vallejo González, Hernán Eduardo
International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
description This paper builds on a circular road model of the world with horizontal product differentiation and free entry and exit of firms, to derive results that can be applied in industrial organization, international trade and political economy. The model shows that freer international trade increases welfare -with ideal variety preferencesthrough the exploitation of economies of scale and better allocative efficiency; that all participating countries gain from trade, and that smaller countries have more to win from free trade than larger countries. The model also explains that there may be adjustment costs when liberalizing trade and thus, political resistance to trade liberalization. International migration can also be analyzed with the model, showing the possibility of suboptimal migration flows and political barriers to the exit of national citizens. The model suggests that foreign direct investment will be welfare improving for the source country in the short run, and for the receiving country in the long run. Finally, the model provides a microfoundation for the use of demand curves with constant and negative slopes.
format Desconocido (Unknown)
author Vallejo González, Hernán Eduardo
author_facet Vallejo González, Hernán Eduardo
author_sort Vallejo González, Hernán Eduardo
title International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
title_short International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
title_full International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
title_fullStr International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
title_full_unstemmed International trade, migration and investment with horizontal product differentiation and free entry and exit of firms
title_sort international trade, migration and investment with horizontal product differentiation and free entry and exit of firms
publisher Universidad de los Andes, Facultad de Economía, CEDE
publishDate 2018
url http://hdl.handle.net/1992/7971
_version_ 1705932470899179520
score 11,828437