On the Dynamics of Trade Reform

Albuquerque, Rui A.; Rebelo, Sergio T.

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On the Dynamics of Trade Reform

Journal of International Economics, Vol. 51, 2000

28 Pages Posted: 30 Dec 2014

See all articles by Rui A. Albuquerque

Rui A. Albuquerque

Boston College, Carroll School of Management; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Sergio T. Rebelo

Northwestern University - Kellogg School of Management; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

There are 2 versions of this paper

Date Written: April 1999

Abstract

The empirical evidence on trade reforms suggests that these have a surprisingly small impact on the country's industrial configuration. This industrial structure inertia is difficult to rationalize in standard trade models. This paper develops a two-sector industry dynamics model in which industrial composition inertia arises naturally. The model is then used to study the consequences of different types of trade reforms (e.g. permanent, temporary, gradual, pre-announced) on investment, employment composition and income distribution.

JEL Classification: F11

Suggested Citation: Suggested Citation

Albuquerque, Rui A. and Tavares Rebelo, Sergio, On the Dynamics of Trade Reform (April 1999). Journal of International Economics, Vol. 51, 2000, Available at SSRN: https://ssrn.com/abstract=2543385