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The network origins of the gains from trade
Journal of Economic Theory, Volume: 216, Start page: 105800
Swansea University Author: Bastian Westbrock
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DOI (Published version): 10.1016/j.jet.2024.105800
Abstract
This paper develops a network perspective on the gains from trade in today's international supply chains. In particular, we demonstrate that the comparative statics predictions of a standard general-equilibrium trade model with input-output linkages can be expressed as a network diffusion model...
Published in: | Journal of Economic Theory |
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ISSN: | 0022-0531 |
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Elsevier BV
2024
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URI: | https://cronfa.swan.ac.uk/Record/cronfa67527 |
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v2 67527 2024-09-02 The network origins of the gains from trade 40408e9de92daaa653357f6b40ed66fd Bastian Westbrock Bastian Westbrock true false 2024-09-02 SOSS This paper develops a network perspective on the gains from trade in today's international supply chains. In particular, we demonstrate that the comparative statics predictions of a standard general-equilibrium trade model with input-output linkages can be expressed as a network diffusion model. This model captures the relevant dimensions of the production network's structure by just two easily quantifiable statistics: A country's upstream exposure to supply shocks further up in the network and its downstream exposure to demand shocks further down. We then show how up- and downstream exposure crucially determine the welfare effects from various types of trade cost shocks. In some cases, they even capture the entire welfare effect. Journal Article Journal of Economic Theory 216 105800 Elsevier BV 0022-0531 Global trade network, Gains from trade, Network diffusion, Trade intermediation 1 3 2024 2024-03-01 10.1016/j.jet.2024.105800 http://dx.doi.org/10.1016/j.jet.2024.105800 COLLEGE NANME Social Sciences School COLLEGE CODE SOSS Swansea University 2024-09-04T09:32:27.2440258 2024-09-02T15:29:07.7926519 Faculty of Humanities and Social Sciences School of Social Sciences - Economics Maarten Bosker 0000-0003-1941-2120 1 Bastian Westbrock 2 67527__31254__eed423e6198843449b004839f8a8a00e.pdf trade_and_networks_Vjan24.pdf 2024-09-04T09:31:35.8824541 Output 1336705 application/pdf Accepted Manuscript true false |
title |
The network origins of the gains from trade |
spellingShingle |
The network origins of the gains from trade Bastian Westbrock |
title_short |
The network origins of the gains from trade |
title_full |
The network origins of the gains from trade |
title_fullStr |
The network origins of the gains from trade |
title_full_unstemmed |
The network origins of the gains from trade |
title_sort |
The network origins of the gains from trade |
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40408e9de92daaa653357f6b40ed66fd |
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40408e9de92daaa653357f6b40ed66fd_***_Bastian Westbrock |
author |
Bastian Westbrock |
author2 |
Maarten Bosker Bastian Westbrock |
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Journal article |
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Journal of Economic Theory |
container_volume |
216 |
container_start_page |
105800 |
publishDate |
2024 |
institution |
Swansea University |
issn |
0022-0531 |
doi_str_mv |
10.1016/j.jet.2024.105800 |
publisher |
Elsevier BV |
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Faculty of Humanities and Social Sciences |
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School of Social Sciences - Economics{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Social Sciences - Economics |
url |
http://dx.doi.org/10.1016/j.jet.2024.105800 |
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description |
This paper develops a network perspective on the gains from trade in today's international supply chains. In particular, we demonstrate that the comparative statics predictions of a standard general-equilibrium trade model with input-output linkages can be expressed as a network diffusion model. This model captures the relevant dimensions of the production network's structure by just two easily quantifiable statistics: A country's upstream exposure to supply shocks further up in the network and its downstream exposure to demand shocks further down. We then show how up- and downstream exposure crucially determine the welfare effects from various types of trade cost shocks. In some cases, they even capture the entire welfare effect. |
published_date |
2024-03-01T09:32:41Z |
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1809253674892918784 |
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11.027627 |