Citation

Discussion Paper Details

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Title: Changes in Infrastructure and Tariff Barriers: Local Vs. Global Impacts

Author(s): Kristian Behrens, Andrea Lamorgese, Gianmarco Ottaviano and Takatoshi Tabuchi

Publication Date: June 2005

Keyword(s): home market effect, imperfect competition, international integration, multi-country trade models and transportation networks

Programme Area(s): International Trade and Regional Economics

Abstract: We develop a multi-country Dixit-Stiglitz model to investigate the impacts of: (i) changes in the international distribution of consumers' expenditure; (ii) decreasing tariffs; and (iii) improvements in transportation infrastructure. We show that, in general, decreasing tariff barriers do not allow for any clear predictions regarding changes in industry location and welfare, whereas this is possible with respect to improvements in transportation infrastructure. In particular, infrastructural improvements have spatially limited impacts when the transportation network is locally described by a tree. Any decrease in transport costs is Pareto welfare enhancing in this case.

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Bibliographic Reference

Behrens, K, Lamorgese, A, Ottaviano, G and Tabuchi, T. 2005. 'Changes in Infrastructure and Tariff Barriers: Local Vs. Global Impacts'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=5103