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Title:Welfare in models of trade with heterogeneous firms PDF Logo
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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