Loughborough University
Browse
Unequal_gains_accepted.pdf (280.98 kB)

Income distribution and unequal gains from trade

Download (280.98 kB)
journal contribution
posted on 2022-03-25, 10:31 authored by Bo GaoBo Gao, Bin Qiu

This paper studies welfare gains from trade in a tractable model with a nonhomothetic preference over product quality. We show that the welfare changes due to trade shocks are unequal across consumers and derive a parsimonious formula to measure these welfare changes as in Arkolakis et al. (2012, American Economic Review, 102, 94–130). We find that the welfare changes are larger for consumers with lower income. Moreover, this paper shows that the welfare implications are different between a change in (iceberg-type) variable trade cost and a change in tariff when tariff revenue matters. More importantly, we show that the difference varies across consumers with different income levels.

Funding

National Social Science Foundation of China (No.20AJY014)

Key Project of Philosophy and Social Science Foundation of Jiangsu Province (No.20EYA002)

Key Project of Philosophy and Social Science Research in Colleges and Universities of Jiangsu Province (No.2018SJZDA011)

History

School

  • Business and Economics

Department

  • Economics

Published in

The World Economy

Volume

46

Issue

1

Pages

236-255

Publisher

Wiley

Version

  • AM (Accepted Manuscript)

Rights holder

© John Wiley & Sons Ltd

Publisher statement

This is the peer reviewed version of the following article: Gao, B., & Qiu, B. (2022). Income distribution and unequal gains from trade. Gao, B., & Qiu, B. (2023). Income distribution and unequal gains from trade. The World Economy, 46, 236– 255. https://doi.org/10.1111/twec.13271, which has been published in final form at https://doi.org/10.1111/twec.13271. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.

Acceptance date

2022-02-27

Publication date

2022-04-29

Copyright date

2022

ISSN

0378-5920

eISSN

1467-9701

Language

  • en

Depositor

Dr Bo Gao. Deposit date: 24 March 2022

Usage metrics

    Loughborough Publications

    Categories

    No categories selected

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC