Trade diversion is reversed in the long run

研究成果: Article

抜粋

We explore the role of economic growth as a cause of reverse trade diversion in an asymmetric three-country Melitz model. A regional trade agreement between countries 1 and 2 decreases country 3's growth rate and the revenue shares of varieties country 3 exports to countries 1 and 2 in the short run, but increases them in the long run, compared with the old balanced growth path. This is because faster short-run growth in countries 1 and 2 than country 3 starts to increase the members' market entry costs more than the nonmember, thereby making the latter relatively more competitive.

元の言語English
ジャーナルReview of Economic Dynamics
DOI
出版物ステータスAccepted/In press - 2020

ASJC Scopus subject areas

  • Economics and Econometrics

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