Intermediation and Economic Integration
11 Pages Posted: 1 Mar 2010
There are 2 versions of this paper
Intermediation and Economic Integration
Date Written: February 2010
Abstract
The theory of international trade has paid scant attention to market institutions. Neither neoclassical theory nor new trade models typically specify the process by which supply and demand meet. Yet in the real world, intermediaries play a central role in materializing the gains from exchange outlined by standard trade theories. In Antràs and Costinot (2010), we have developed a stylized but explicit model of intermediation in trade. In this short paper, we present a variant of this model that illustrates the potential role of intermediaries in facilitating the realization of the gains from trade.
Keywords: economic integration, gains from trade, intermediation, search frictions
JEL Classification: D2, D3, F10, F15, O1
Suggested Citation: Suggested Citation
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