Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35737
Authors: 
Janiak, Alexandre
Year of Publication: 
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: 
Document Type: 
Working Paper

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