Article thumbnail
Location of Repository

Short-run and long-run welfare implications of free trade

By Pablo Serra Banfi


We consider a two-factor (capital and labour), two-good (consumption and invest- ment goods), one-country, overlapping-generations model. For the case in which the closed economy follows an efficient path we prove that if trade lowers (raises) the relative price of the capital-intensive good, the current old people, who only own capital, lose (gain) from the opening of the economy, while all subsequent generations, whose only endowment is labour, benefit (lose) from it. It is also shown that the country gains from trade, in the sense that the generations made better off by trade can compensate those that lose from the opening of the econom

Publisher: Wiley-Blackwell
Year: 1991
OAI identifier:
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • (external link)
  • Suggested articles

    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.