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Fixed Transport Costs and International Trade
Book chapter

Fixed Transport Costs and International Trade

Didier Laussel and Raymond Riezman
Contemporary and Emerging Issues in Trade Theory and Policy, Vol.4, pp.91-107
Frontiers of Economics and Globalization, v. 4, Emerald
2008
DOI: 10.1016/S1574-8715(08)04005-0

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Abstract

We develop a simple two-country model of international trade that assumes that there is a fixed cost of doing international trade. We show that this leads to multiple equilibria that can be Pareto-ranked. We examine the stability properties of these equilibria.
Economics Social Sciences Business & Economics

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