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- handle: 10670/1.9mg1i2
- hal: hal-03460459
- doi: 10.1257/aer.104.5.310
- SCIENCESPO: 2441/5fjm1f1p0v93k9png4qo8ltnrf
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info:eu-repo/semantics/altIdentifier/doi/10.1257/aer.104.5.310
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info:eu-repo/semantics/altIdentifier/hdl/2441/5fjm1f1p0v93k9png4qo8ltnrf
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info:eu-repo/grantAgreement/EC/FP7/313522/EU/Heterogeneity That Matters for Trade and Welfare/HETMAT
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Mots-clés
Welfare Theory Trade Models Microdata Simulations C - Mathematical and Quantitative Methods/C.C4 - Econometric and Statistical Methods: Special Topics/C.C4.C46 - Specific Distributions • Specific Statistics D - Microeconomics/D.D2 - Production and Organizations/D.D2.D24 - Production • Cost • Capital • Capital, Total Factor, and Multifactor Productivity • Capacity D - Microeconomics/D.D4 - Market Structure, Pricing, and Design/D.D4.D43 - Oligopoly and Other Forms of Market Imperfection D - Microeconomics/D.D6 - Welfare Economics/D.D6.D60 - General L - Industrial Organization/L.L1 - Market Structure, Firm Strategy, and Market Performance/L.L1.L13 - Oligopoly and Other Imperfect Markets L - Industrial Organization/L.L2 - Firm Objectives, Organization, and Behavior/L.L2.L25 - Firm Performance: Size, Diversification, and ScopeSujets proches
Trade Commercial trade Foreign trade Trade TradeCiter ce document
Keith Head et al., « Welfare and Trade without Pareto », HAL-SHS : économie et finance, ID : 10.1257/aer.104.5.310
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Résumé
Quantifications of gains from trade in heterogeneous firm models assume that productivity is Pareto distributed. Replacing this assumption with log-normal heterogeneity retains some useful Pareto features, while providing a substantially better fit to sales distributions-especially in the left tail. The cost of log-normal is that gains from trade depend on the method of calibrating the fixed cost and productivity distribution parameters. When set to match the size distribution of firm sales in a given market, the log-normal assumption delivers gains from trade in a symmetric two-country model that can be twice as large as under the Pareto assumption.