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Trade, non-homothetic preferences, and the impact of country size on wages

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  • Wang, Xichao
  • Gibson, Mark J.

Abstract

We show that the larger country does not always get the higher wage in a trade model with non-homothetic preferences. The cases of one representative consumer and many identical consumers yield different results.

Suggested Citation

  • Wang, Xichao & Gibson, Mark J., 2015. "Trade, non-homothetic preferences, and the impact of country size on wages," Economics Letters, Elsevier, vol. 132(C), pages 121-124.
    • Handle: RePEc:eee:ecolet:v:132:y:2015:i:c:p:121-124
    DOI: 10.1016/j.econlet.2015.05.004
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    References listed on IDEAS

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    Cited by:

    1. Alexander Osharin & Valery Verbus, 2018. "Heterogeneity of consumer preferences and trade patterns in a monopolistically competitive setting," Journal of Economics, Springer, vol. 125(3), pages 211-237, November.
    2. Hajime Takatsuka & Dao‐Zhi Zeng, 2018. "Elastic labor supply, variable markups, and spatial inequalities," Review of International Economics, Wiley Blackwell, vol. 26(5), pages 1084-1100, November.
    3. Alexander Osharin & Valery Verbus, 2016. "Heterogeneous consumers and trade patterns in a monopolistically competitive setting," HSE Working papers WP BRP 131/EC/2016, National Research University Higher School of Economics.

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    More about this item

    Keywords

    Trade; Non-homotheticity; Country size; Wages;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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