Seminario di Alessia Campolmi

Sala Seminari – I° piano, Palazzo Levi Cases, Via del Santo 33 - ore 12:30

21.06.2016

Seminario di Alessia Campolmi, Adam Smith Business School, University of Glasgow

Trade Policy in Models with Monopolistic Competition (joint with Harald Fadinger (University of Mannheim) and Chiara Forlati (University of Southampton)

There are many papers analysing trade policy in models with monopolistic competition. They typically derive model-specific welfare decompositions, which they employ to identify the incentives for using specific trade policy instruments. In this paper, we consider two work-horse models of international trade, Krugman (1980) and Melitz (2003), and derive a welfare decomposition that is valid across a broad class of models.  We show that there are three and only three motives for trade policy in these models: Terms-of-Trade externalities, Production Efficiency and Consumption Efficiency considerations.