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Download fileThe capital value of the search for trading matches
This note explores the value of search capital in interim matches in the outsourcing trade, by extending
Rauch and Casella s (2003) framework to a dynamic model of matching and searching. On provisional calculations, the sunken cost of this search imposes a similar order of magnitude trade barrier to most tariffs, and
would be expected to affect both the intensive and extensive margins of trade.
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