Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73436
Authors: 
Pflüger, Michael
Russek, Stephan
Year of Publication: 
2011
Series/Report no.: 
BGPE Discussion Paper 94
Abstract: 
This paper explores the role of country asymmetries for trade and industrial policies with heterogeneous firms. Our analysis delivers a number of novel results. First, trade policies, infrastructure policies and industrial policies which improve the business conditions in one country have negative productivity and welfare effects on the trading partner. Second, symmetric trade liberalization is immiserizing for a trading partner whose business conditions are inferior. Third, there are gains from trade even for a country whose monopolistically competitive sector with heterogeneous firms is wiped out by the switch from autarky to trade.
Subjects: 
firm heterogeneity
welfare
trade policies
industrial policies
business conditions
JEL: 
F12
F13
F15
L25
Document Type: 
Working Paper

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