|By:||Rosas-Martinez, Victor H.|
We assess theoretically the effect of forming a free trade union on the total production of a nation, where such effects are caused by the absorption of technologies. A popular metaphor describes the people as crabs in a bucket because when one crab tries to scape, the others pull it down avoiding a possible way out for all of them. Given this knowledge, posteriorly and independently of the income inequality levels, we extend our analyses to consider the effect of envy in a macroeconomic level on the total production, and draw the implications which this phenomenon has on the formation of free trade unions. We make strategic policy recommendations to allow the achievement of a globalization that benefits each member nation, where we show that the great trade union might have to start with gradual and charitable subregional agreements.
|Keywords:||International Trade; Technological Absorption; Behavioral Macroeconomics; Economic Growth; Trade Policy|
- S. Choi, A. Galeotti, S. Goyal.Trading in networks: theory and experiments, -Cambridge-INET Working Paper, 2014
M. Kosfeld. Economic Networks in the Laboratory: A Survey, Institute for Empirical Researchin Economics, University of Zurich, 2015.
|By:||Paul Johnson (Department of Economics and Public Policy, University of Alaska Anchorage)
Qiujie Zheng (Department of Economics and Public Policy, University of Alaska Anchorage)
This paper describes a classroom experiment that demonstrates coordination and competition between traders in a network. Students test theoretical predictions concerning the emergence of equilibrium and the division of surplus between buyers and sellers. The experiment is appropriate for use in teaching intermediate microeconomics, industrial organization, transportation economics and game theory.
|Keywords:||Experimental Economics, Classroom Experiment, Trading in Networks|
|JEL:||A22 B21 C92|
The bilateral trade relations between world countries form a complex network, the International Trade Network (ITN), which is involved in an increasing number of worldwide economic processes, including globalization, integration, industrial production, and the propagation of shocks and instabilities. Characterizing the ITN via a simple yet accurate model is an open problem. The classical Gravity Model of trade successfully reproduces the volume of trade between two connected countries using known macroeconomic properties such as GDP and geographic distance. However, it generates a network with an unrealistically homogeneous topology, thus failing to reproduce the highly heterogeneous structure of the real ITN. On the other hand, network models successfully reproduce the complex topology of the ITN, but provide no information about trade volumes. Therefore macroeconomic and network models of trade suffer from complementary limitations but are still largely incompatible. Here, we make an important step forward in reconciling the two approaches, via the introduction of what we denote as the Enhanced Gravity Model (EGM) of trade. The EGM combines the maximum-entropy nature of network models with the established econometric structure of the Gravity Model. Using a single, unified and principled mechanism that is transparent enough to be generalized to other economic networks, the EGM allows trade probabilities and trade volumes to be separately controlled via any combination of dyadic and country-specific macroeconomic variables. We show that the EGM successfully reproduces both the topology and the weights of the ITN, finally reconciling the conflicting approaches. Moreover, it provides a general and simple theoretical explanation for the failure of economic models that do not explicitly focus on network topology: namely, their lack of topological invariance under a change of units.
這是一個對經濟學「教學」和「學習」都很棒的網站: 目錄如下, 也有 PDF 版。
By Dieter Balkenborg and Todd Kaplan, University of Exeter (UK).
|By:||Toshihiro Okubo (Research Institute for Economics and Business Administration, Kobe University)
Pierre M. Picard (CREA, University of Luxembourg (Luxembourg) and CORE, UniversitÃ© catholique de Louvain (Belgium))
Jacques-FranÃ§ois THISSE (CORE, UniversitÃ© catholique de Louvain (Belgium), UniversitÃ© du Luxembourg, CEPR, and RIEB, Kobe University)
We study how the level of trade costs and the intensity of competition can explain the existence of two-way, one-way or no trade within the same industry. As trade costs decrease from very high to very low values, the economy moves from autarky to a regime of two-way trade, through a regime of one-way trade from the larger to the smaller country. Trade is less likely when the economy gets more competitive. Finally once capital is mobile across countries, the market delivers an outcome in which capital is too much concentrated in the large country.
|Keywords:||trade regime; country asymmetry; capital mobility|
Elhanan Helpman (1981) “International trade in the presence of product differentiation, economies of scale and monopolistic competition : A Chamberlin-Heckscher-Ohlin approach." Journal of International Economics, Volume 11, Issue 3, August 1981, Pages 305-340. doi:10.1016/0022-1996(81)90001-5.
The paper presents a generalization of the Heckscher-Ohlin theory by admitting the existence of sectors in which there is monopolistic competition. The structure of preferences is based on Lancaster’s work. It is shown without requiring homotheticity in the production of differentiated products that the intersectoral pattern of trade can be predicted from factor endowments but not from pre-trade commodity prices or factor rewards, except under special circumstances. It is also shown how the share of intra-industry trade is related to differences in income per capita and how the volume of trade depends on differences in income per capita and relative country-size. Other empirical implications are also discussed.