On zero and asymmetric trade flows

Reference : On zero and asymmetric trade flows


	Document type :	E-prints/Working papers : Already available on another site
	Discipline(s) :	Business & economic sciences : Microeconomics
	To cite this reference:	http://hdl.handle.net/10993/12884

Title :	On zero and asymmetric trade flows
Language :	English
Author, co-author :	Okubo, Toshihiro [> >]
	Picard, Pierre M. [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
	Thisse, Jacques-François [> >]
Publication date :	2010
Publisher :	Center for Research in Economic Analysis, University of Luxembourg
Collection and collection volume :	CREA Discussion Paper Series 10-08
Peer reviewed :	Yes
Keywords :	[en] trade regime ; country asymmetry ; capital mobility
Abstract :	[en] In this paper we study how the trade costs and the intensity of competition can explain the existence of bilateral trade, unilateral trade and no trade within an industry. We show as trade costs decrease from very high to very low values, the global economy moves from autarky to a regime of bilateral trade, through a regime of unilateral trade from the larger to the smaller country. Bilateral or unilateral trade is less likely when the global economy gets more competitive. Finally, the market delivers an outcome in which capital is too much concentrated in the larger country.
Target :	Researchers ; Students
Permalink :	http://hdl.handle.net/10993/12884
source URL :	http://wwwfr.uni.lu/content/download/28785/339998/file/2010_08-On%20zero%20and%20asymmetric%20trade%20flows.pdf

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