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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

邮发代号 80-978

Frontiers of Economics in China  2018, Vol. 13 Issue (1): 5-14   https://doi.org/10.3868/s060-007-018-0002-0
  本期目录
Local Import Competition in a Lumpy Country
Alan V. Deardorff()
Ford School of Public Policy, University of Michigan, Ann Arbor, MI 48109, USA
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Abstract

This paper examines the effects of a fall in the price of an imported good in a region of a country that is specialized in producing that good. The context is a “lumpy country” model in which factors are unable to move between locations, although in this case I assume that only labor is immobile, and that the other factor, capital, is perfectly mobile between regions. With mobile capital, the lumpy-country equilibrium can be anywhere in the factor-price equalization set, but my focus is on a region that initially produces only one good, on the border of that set. When the price of that good falls due to import competition, it would be possible for both factors to reallocate partially into production of the other good, but I assume instead that some capital simply leaves the region, so that it continues to produce only the same good that it did before. The result of this is a fall in the real wage of labor, just as under Stolper-Samuelson assumptions. I then look at production also of a non-traded good, and find that the same import competition that cheapened the traded good also cheapens the nontraded good. The result is that the region shrinks, losing capital and producing less of both goods unless the substitution in favor of the nontraded good expands its consumption out of a smaller income.

Key wordsimport competition    lumpy country    nontraded good
出版日期: 2018-03-15
 引用本文:   
. [J]. Frontiers of Economics in China, 2018, 13(1): 5-14.
Alan V. Deardorff. Local Import Competition in a Lumpy Country. Front. Econ. China, 2018, 13(1): 5-14.
 链接本文:  
https://academic.hep.com.cn/fec/CN/10.3868/s060-007-018-0002-0
https://academic.hep.com.cn/fec/CN/Y2018/V13/I1/5
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