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- W2586354220 abstract "The home market eect (HME) is an essential topic within the new trade theory. Assuming that transport costs exist only for manufactured goods, Krugman (1980) shows that the country with the larger market size is a net exporter. Davis (1998) nds that the assumption of free transport of the agricultural good is not innocuous, and indeed matters a great deal. However, we nd that the homogeneous-agricultural-good assumption in Davis’ model yields the discontinuity of inverse demand functions, which causes the disappearance of the HME. Assuming two dieren tiated agricultural goods in two countries, we establish an analytically solvable model and show that the HME does exist even if the transport cost of the agricultural goods is positive. (JEL F1, R1)" @default.
- W2586354220 created "2017-02-17" @default.
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- W2586354220 date "2005-01-01" @default.
- W2586354220 modified "2023-09-27" @default.
- W2586354220 title "The Home Market Eect and the Agricultural Sector" @default.
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