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N° 94-95 |
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| Issues 2-3 2003 |
Exploring the
Links Between Transaction Costs, income Distribution and Economic Performance
in a Case Study for Colombia |
|
Maurizio Bussolo
John Whalley
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| Standard international trade
models have consistently produced results that, compared ex post with real
world data, show the right sign but much smaller magnitudes. Besides, for
the case of developing countries, these same models predict that unskilled
labour would gain from liberalization, and this too contrasts with empirical
evidence. This paper proposes a new approach by considering transaction
costs reductions as an important factor explaining developing countries'
actual performances. A clear mapping of the analytical channels through
which changes of transaction costs affect the economic results is achieved
by using a general equilibrium model with explicit transaction costs. Additionally
this paper examines how transaction costs influence income distribution.
Numerical simulations based on Colombia are presented. |
Abstract |
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| Thematic
issue: "Agreements on Trade Liberalisation: Latin America and the Caribbean" |
Full
Text |
| International
Trade; Transaction Costs; Simulation Models; Income Distribution |
Keywords |
| D58; F11; F13;
O10; O54 |
JEL classification |
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Order form |
