Can growth of a trading partner harm a country?

Soo, K T (2008) Can growth of a trading partner harm a country? Journal of Economic Integration, 23 (1). pp. 57-74. ISSN 1225-651X

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Abstract

Can growth of a trading partner harm a country? This paper seeks to answer this question through the use of an eclectic trade model which is similar in flavour to Markusen (1986). This paper makes two contributions. First, it develops a simple and tractable model of international trade based on a combination of imperfect competition, comparative advantage, and identical but non-homothetic preferences in a three country framework. Second, it uses this framework to consider the possibility of losses from partner-country growth in a free-trading environment. We find that the presence of nonhomothetic preferences in particular, leads to a home bias in consumption which dampens any negative welfare effects when a country's trading partners grow.

Item Type: Journal Article
Journal or Publication Title: Journal of Economic Integration
Uncontrolled Keywords: /dk/atira/pure/subjectarea/aacsb/disciplinebasedresearch
Subjects:
Departments: Lancaster University Management School > Economics
ID Code: 45043
Deposited By: ep_importer_pure
Deposited On: 11 Jul 2011 18:25
Refereed?: Yes
Published?: Published
Last Modified: 19 Jul 2019 00:24
URI: https://eprints.lancs.ac.uk/id/eprint/45043

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