Intermediation and Economic Integration

11 Pages Posted: 1 Mar 2010

See all articles by Pol Antras

Pol Antras

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Arnaud Costinot

University of California, San Diego (UCSD) - Department of Economics; Massachusetts Institute of Technology (MIT) - Department of Economics

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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

Antras, Pol and Costinot, Arnaud and Costinot, Arnaud, Intermediation and Economic Integration (February 2010). CEPR Discussion Paper No. DP7697, Available at SSRN: https://ssrn.com/abstract=1559653

Pol Antras (Contact Author)

Harvard University - Department of Economics ( email )

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Arnaud Costinot

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