Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130180
Authors: 
Wilson, Chris M.
Year of Publication: 
11-Apr-2016
Abstract: 
There is widespread evidence that geographical borders reduce trade. This paper presents a theoretical model capable of providing a succinct comparison of three broad forms of trade barriers involving i) trade costs, ii) localized tastes, and iii) information frictions. Despite being traditionally under-researched, it provides the stark finding that information frictions often provide the relatively more powerful marginal effect in reducing cross-border trade, and associated levels of welfare. This result remains robust under a number of extensions that further document the roles of product differentiation and alternative forms of trade costs.
Subjects: 
Information Frictions
Search Costs
Trade Costs
Localized Tastes
Product Differentiation
JEL: 
F10
L13
Document Type: 
Preprint

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