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- W326769439 abstract "Abstract We revisit the question of the quantitative benefits of WTO trade agreements in a setup that is non-standard from the traditional trade policy point of view. We show that in a New Keynesian model, unilateral trade liberalization reduces welfare due to terms-of-trade deterioration, creating an incentive for a trade agreement. For realistic parameter values, the value of an agreement, which cuts tariffs by one percentage point, is 0.5–2% of consumption, much larger than in trade models. The intuition for this result hinges on endogenous labor supply." @default.
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- W326769439 date "2015-09-01" @default.
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- W326769439 title "Value of WTO trade agreements in a New Keynesian model" @default.
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- W326769439 doi "https://doi.org/10.1016/j.jmacro.2015.06.001" @default.
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