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Product Variety and the Gains from International Trade$
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Robert C. Feenstra

Print publication date: 2010

Print ISBN-13: 9780262062800

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262062800.001.0001

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Producer Benefits from Export Variety

Producer Benefits from Export Variety

Chapter:
(p.39) 3 Producer Benefits from Export Variety
Source:
Product Variety and the Gains from International Trade
Author(s):

Robert C. Feenstra

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262062800.003.0003

This chapter evaluates producer benefits from export variety under the monopolistic competition model. It suggests that self-selection of firms can still be interpreted as a gain from product variety but on the export side of the economy rather than for imports. It also explains that consumer gains from import variety in Marc J. Melitz’s model cancel out with the reduction in domestic varieties when trade is opened and contends that self-selection of firms leads to a constant-elasticity transformation curve between domestic and export varieties.

Keywords:   producer benefits, export variety, monopolistic competition model, consumer gains, self-selection of firms, constant-elasticity transformation

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