Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191779
Authors: 
Stark, Oded
Zawojska, Ewa
Kohler, Wilhelm
Szczygielski, Krzysztof
Year of Publication: 
2018
Series/Report no.: 
ZEF Discussion Papers on Development Policy No. 260
Abstract: 
Acknowledging individuals’ distaste for low relative income renders trade less appealing when trade is viewed as a technology that integrates economies by merging separate social spheres into one. We define a “trembling trade” as a situation in which gains from trade are overtaken by losses of relative income, with the result that global social welfare is reduced. A constructive example reveals that a “trembling trade” can arise even when trade is doubly gainful in that it increases the income of every individual and narrows the income gap between the trading populations.
Subjects: 
Gains from trade
Increase of incomes
Decrease of income gap
Integration
Change of social space
Low relative income
Social welfare
JEL: 
D31
D63
R12
Document Type: 
Working Paper

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