International trade and trade creation under instability

David Bigman

doi:10.1016/S0014-2921(85)80011-8

International trade and trade creation under instability

David Bigman

Research output: Contribution to journal › Article › peer-review

1 Scopus citations

Abstract

The paper examines the lasting and real effects of random, short-term fluctuations in supply and demand, that are expecially characteristic of agricultural products, on the country's trade, welfare and income distribution. One effect of supply and demand variability is to considerably increase the trade flows over and above the trade generated by the country's permanent comparative advantage. Another effect is enhanced production risk that may increase rather than decline with free trade. For some crops free trade may therefore be Pareto inferior to autarky while for others it would still be Pareto efficient - depending mostly on the corresponding price elasticity of demand.

Original language	English
Pages (from-to)	309-330
Number of pages	22
Journal	European Economic Review
Volume	28
Issue number	3
DOIs	https://doi.org/10.1016/S0014-2921(85)80011-8
State	Published - 1 Jan 1985
Externally published	Yes

ASJC Scopus subject areas

Finance
Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/S0014-2921(85)80011-8

Cite this

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title = "International trade and trade creation under instability",

abstract = "The paper examines the lasting and real effects of random, short-term fluctuations in supply and demand, that are expecially characteristic of agricultural products, on the country's trade, welfare and income distribution. One effect of supply and demand variability is to considerably increase the trade flows over and above the trade generated by the country's permanent comparative advantage. Another effect is enhanced production risk that may increase rather than decline with free trade. For some crops free trade may therefore be Pareto inferior to autarky while for others it would still be Pareto efficient - depending mostly on the corresponding price elasticity of demand.",

author = "David Bigman",

note = "Funding Information: *The paper was written while I was on leave at the World Bank. The research was supported in part by a grant from the United States-lsrael (Binational) Agricultural Research and Development Fund. The views presented here are those of the author, and they should not be interpreted as reflecting those of the World Bank.",

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N2 - The paper examines the lasting and real effects of random, short-term fluctuations in supply and demand, that are expecially characteristic of agricultural products, on the country's trade, welfare and income distribution. One effect of supply and demand variability is to considerably increase the trade flows over and above the trade generated by the country's permanent comparative advantage. Another effect is enhanced production risk that may increase rather than decline with free trade. For some crops free trade may therefore be Pareto inferior to autarky while for others it would still be Pareto efficient - depending mostly on the corresponding price elasticity of demand.

AB - The paper examines the lasting and real effects of random, short-term fluctuations in supply and demand, that are expecially characteristic of agricultural products, on the country's trade, welfare and income distribution. One effect of supply and demand variability is to considerably increase the trade flows over and above the trade generated by the country's permanent comparative advantage. Another effect is enhanced production risk that may increase rather than decline with free trade. For some crops free trade may therefore be Pareto inferior to autarky while for others it would still be Pareto efficient - depending mostly on the corresponding price elasticity of demand.

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International trade and trade creation under instability

Abstract

ASJC Scopus subject areas

UN SDGs

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