Skip to Main content Skip to Navigation
Master Thesis

The heterogeneous effects of trade on asymmetric countries

Abstract : In order to investigate the effects of trade on asymmetric countries, we build a simple two-country Melitz model with cross-country efficiency differences and market size variations. We also introduce a public good financed by tax revenues. We find that free trade makes the more efficient country produce more and alleviate the fiscal burden on its economy. The effects are completely opposite for the other country. Furthermore, we show that when the relative size of the technologically advanced country is large enough, we assist to an agglomeration of resources in this country. The main contribution of this paper is to prove that the more asymmetric the countries are, the more heterogeneous is the impact of trade on their respective GDP, aggregate profits and tax rate.
Document type :
Master Thesis
Complete list of metadatas

Cited literature [10 references]  Display  Hide  Download
Contributor : Centre de Documentation Du Centre d'Économie de la Sorbonne <>
Submitted on : Friday, July 29, 2016 - 12:28:24 PM
Last modification on : Sunday, January 19, 2020 - 6:38:36 PM
Long-term archiving on: : Sunday, October 30, 2016 - 12:04:47 PM


  • HAL Id : dumas-01349915, version 1


Badis Tabarki. The heterogeneous effects of trade on asymmetric countries. Economics and Finance. 2015. ⟨dumas-01349915⟩



Record views


Files downloads