A Coasian model of international production chains

October 6, 2015

This paper provides an analytical treatment of trade and welfare responses to trade cost change in a simple two-country model. To explore the model's implications in a richer setting, the model is calibrated to match key observables in East Asia, and the calibrated model is used to evaluate implications of changes in model parameters for trade, welfare, the length of supply chains, and countries' relative position within them.

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Topics: GLOBAL VALUE CHAINS (GVCS)

Regions: EAST ASIA

Authors: THIBAULT FALLY RUSSEL HENRY HILLBERRY

Publishing Institution: WORLD BANK GROUP

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