Trade and Domestic Policies under Monopolistic Competition
研究了在垄断竞争和不变替代弹性需求模型下，贸易协定是否应约束国内政策，通过福利分解分析浅层与深层贸易协定的效率差异。
Abstract Should trade agreements constrain domestic policies? We analyse this question using a model with monopolistic competition and constant-elasticity-of-substitution demand. We develop a welfare decomposition to show that welfare changes induced by trade and domestic policies can be decomposed into consumption and production efficiencies and terms-of-trade effects. We analyse the reasons to sign trade agreements and compare shallow and deep trade agreements, modelled according to GATT-WTO rules. Under monopolistic competition, unlike deep trade agreements, shallow agreements with market access commitments may not achieve efficiency because terms of trade can be improved without reducing market access by increasing the set of foreign firms selling domestically.