Monopolistic Competition and North–South Trade

16 Pages Posted: 24 Jul 2011

See all articles by Reza Oladi

Reza Oladi

Utah State University - College of Business - Department of Economics

Date Written: August 2011

Abstract

This paper examines the consequences of opening to international trade for a developing economy with open urban unemployment and rural–urban migration, where the urban sector is monopolistically competitive. It is shown that there exists a threshold level of urbanization prior to which increases in product variety will be reflected in increased urban unemployment, that opening to intra‐industry trade with a high‐wage economy (i.e. North–South trade) will reduce the rate of urban unemployment by a greater amount than intra‐industry trade with a similar economy, and that trade intervention in the South may lower welfare by reducing varieties produced in the North.

Suggested Citation

Oladi, Reza, Monopolistic Competition and North–South Trade (August 2011). Review of International Economics, Vol. 19, Issue 3, pp. 459-474, 2011. Available at SSRN: https://ssrn.com/abstract=1892614 or http://dx.doi.org/10.1111/j.1467-9396.2011.00959.x

Reza Oladi (Contact Author)

Utah State University - College of Business - Department of Economics ( email )

3530 Old Main Hill
Logan, UT 84322-3530
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
2
Abstract Views
153
PlumX Metrics