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| Title: | | Welfare in models of trade with heterogeneous firms  |
| Authors: | | Janiak, Alexandre |
| Issue Date: | | 2008 |
| Series/Report no.: | | IZA discussion papers 3803 |
| Abstract: | | I illustrate that the welfare improvement property of the Melitz model is due to the shape of the aggregate labor demand curve, which slopes upwards. By slightly changing some assumptions in the model, this curve may have a negative slope. In this case, increases in aggregate productivity result in a reduction in welfare. For example, this may occur when fixed costs are measured in units of aggregate output instead of labor. |
| Subjects: | | Heterogenous firms international trade aggregate labor demand curve welfare |
| JEL: | | F12 |
| Persistent Identifier of the first edition: | | urn:nbn:de:101:1-20081126786 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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