International Trade and Retailing

38 Pages Posted: 1 May 2009

See all articles by Carsten Eckel

Carsten Eckel

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 2009

Abstract

The New Trade Theory predicts that international trade lowers prices for consumers and expands the choices available to them. This study shows that both predictions may no longer hold once adjustments in the retail sector are taken into account. I present a new model of retailing in general equilibrium and explore its implications for a number of different shocks. The results demonstrate that retail assortments may remain constant if consumers have a low preference for diversity, and that consumer prices can even rise if the retail density is sufficiently low.

Keywords: international trade, retailing, diversity, market structure, welfare, monopolistic competition

JEL Classification: F12, L11, L81

Suggested Citation

Eckel, Carsten, International Trade and Retailing (March 2009). CESifo Working Paper Series No. 2597, Available at SSRN: https://ssrn.com/abstract=1368663

Carsten Eckel (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Schackstr. 4
Munich, 80539
Germany

HOME PAGE: http://www.vwl.uni-muenchen.de/eckel

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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