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Uncertainty, arbitrage, and intra-industry trade

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Uncertainty, arbitrage, and intra-industry trade. / Dasgupta, Sudipto; Ray, Tridip; Pong Wong, Kit.

In: Canadian Journal of Economics / Revue Canadienne d'Économique, Vol. 35, No. 4, 11.2002, p. 757-785.

Research output: Contribution to Journal/MagazineJournal articlepeer-review

Harvard

Dasgupta, S, Ray, T & Pong Wong, K 2002, 'Uncertainty, arbitrage, and intra-industry trade', Canadian Journal of Economics / Revue Canadienne d'Économique, vol. 35, no. 4, pp. 757-785. https://doi.org/10.1111/1540-5982.00153

APA

Dasgupta, S., Ray, T., & Pong Wong, K. (2002). Uncertainty, arbitrage, and intra-industry trade. Canadian Journal of Economics / Revue Canadienne d'Économique, 35(4), 757-785. https://doi.org/10.1111/1540-5982.00153

Vancouver

Dasgupta S, Ray T, Pong Wong K. Uncertainty, arbitrage, and intra-industry trade. Canadian Journal of Economics / Revue Canadienne d'Économique. 2002 Nov;35(4):757-785. doi: 10.1111/1540-5982.00153

Author

Dasgupta, Sudipto ; Ray, Tridip ; Pong Wong, Kit. / Uncertainty, arbitrage, and intra-industry trade. In: Canadian Journal of Economics / Revue Canadienne d'Économique. 2002 ; Vol. 35, No. 4. pp. 757-785.

Bibtex

@article{c19a52cd1e624be0aab41906f0ee3e45,
title = "Uncertainty, arbitrage, and intra-industry trade",
abstract = "When firms in the same industry located in different regions or countries experience shocks to production costs in their respective industries that are imperfectly correlated, arbitrage opportunities automatically lead to trade. Trade can either stabilize or destabilize the price faced by producers in a given country. Producers{\textquoteright} surplus is affected , owing to the {\textquoteleft}variance-covariance{\textquoteright} effect, while consumers{\textquoteright} surplus is more directly affected through the variance of the product price. We examine how consumers{\textquoteright} surplus, producers{\textquoteright} surplus, and social welfare are affected when the regions switch from autarky to free trade in the presence of industry and region-specific cost shocks.",
author = "Sudipto Dasgupta and Tridip Ray and {Pong Wong}, Kit",
year = "2002",
month = nov,
doi = "10.1111/1540-5982.00153",
language = "English",
volume = "35",
pages = "757--785",
journal = "Canadian Journal of Economics / Revue Canadienne d'{\'E}conomique",
issn = "0008-4085",
publisher = "Wiley-Blackwell",
number = "4",

}

RIS

TY - JOUR

T1 - Uncertainty, arbitrage, and intra-industry trade

AU - Dasgupta, Sudipto

AU - Ray, Tridip

AU - Pong Wong, Kit

PY - 2002/11

Y1 - 2002/11

N2 - When firms in the same industry located in different regions or countries experience shocks to production costs in their respective industries that are imperfectly correlated, arbitrage opportunities automatically lead to trade. Trade can either stabilize or destabilize the price faced by producers in a given country. Producers’ surplus is affected , owing to the ‘variance-covariance’ effect, while consumers’ surplus is more directly affected through the variance of the product price. We examine how consumers’ surplus, producers’ surplus, and social welfare are affected when the regions switch from autarky to free trade in the presence of industry and region-specific cost shocks.

AB - When firms in the same industry located in different regions or countries experience shocks to production costs in their respective industries that are imperfectly correlated, arbitrage opportunities automatically lead to trade. Trade can either stabilize or destabilize the price faced by producers in a given country. Producers’ surplus is affected , owing to the ‘variance-covariance’ effect, while consumers’ surplus is more directly affected through the variance of the product price. We examine how consumers’ surplus, producers’ surplus, and social welfare are affected when the regions switch from autarky to free trade in the presence of industry and region-specific cost shocks.

U2 - 10.1111/1540-5982.00153

DO - 10.1111/1540-5982.00153

M3 - Journal article

VL - 35

SP - 757

EP - 785

JO - Canadian Journal of Economics / Revue Canadienne d'Économique

JF - Canadian Journal of Economics / Revue Canadienne d'Économique

SN - 0008-4085

IS - 4

ER -