Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/190820 
Year of Publication: 
2018
Publisher: 
ZBW – Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
Increasing international flows of goods, services, and financial assets have been shown to increase a country's welfare through various channels. This paper studies the interaction between a country's welfare gains from international trade and its sovereign’s access to bond markets. We do so by incorporating a sovereign bond market into a simple Armington (1969) trade model. While standard trade models suggest surprisingly small gains from trade, our model implies that introducing channels through a sovereign bond market greatly magnifies the gains from trade.
Subjects: 
Gains from trade
Sovereign debt
Sovereign default
Trade openness
JEL: 
F14
F60
Document Type: 
Working Paper

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