OxTalks will soon move to the new Halo platform and will become 'Oxford Events.' There will be a need for an OxTalks freeze. This was previously planned for Friday 14th November – a new date will be shared as soon as it is available (full details will be available on the Staff Gateway).
In the meantime, the OxTalks site will remain active and events will continue to be published.
If staff have any questions about the Oxford Events launch, please contact halo@digital.ox.ac.uk
We reconsider Krugman’s love-of-variety model of trade (Krugman, 1979). We show that initially, as trade costs fall below the prohibitive level, trade leaves everybody worse off. The reason is that, due to the envelope theorem, the gains from trade are second-order, while the utility losses associated with the disappearance of domestic varieties are first-order. This finding is robust. It applies to unilateral and coordinated reductions in trade cost or tariffs, and it extends to heterogeneous firms and arbitrary asymmetries between countries. Even if perfectly free and costless trade dominates autarky, a bit off trade is worse than either of the two.
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