Discussion Paper Details
Please find the details for DP8161 in an easy to copy and paste format below:
Title: No trade, one-way or two-way trade?
Author(s): Toshihiro Okubo, Pierre M Picard and Jacques-François Thisse
Publication Date: December 2010
Keyword(s): capital mobility, country asymmetry and trade regime
Programme Area(s): International Trade and Regional Economics
Abstract: 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.
For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8161
Okubo, T, Picard, P and Thisse, J. 2010. 'No trade, one-way or two-way trade?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=8161