Working Paper: CEPR ID: DP7697
Authors: Pol Antràs; Arnaud Costinot
Abstract: The theory of international trade has paid scant attention to market institutions. Neither neoclassical theory nor new trade models typically specify the process by which supply and demand meet. Yet in the real world, intermediaries play a central role in materializing the gains from exchange outlined by standard trade theories. In Antràs and Costinot (2010), we have developed a stylized but explicit model of intermediation in trade. In this short paper, we present a variant of this model that illustrates the potential role of intermediaries in facilitating the realization of the gains from trade.
Keywords: economic integration; gains from trade; intermediation; search frictions
JEL Codes: D2; D3; F10; F15; O1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| wintegration (F15) | welfare outcomes (I38) |
| mintegration (F15) | welfare outcomes (I38) |
| mintegration (F15) | farmer welfare (D69) |
| mintegration (F15) | trader welfare (D69) |
| bargaining power dynamics (C79) | welfare outcomes (I38) |
| technological differences (O33) | welfare outcomes (I38) |