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On Nations’ Size and Transportation Costs *
Author(s) -
Shachmurove Yochanan,
Spiegel Uriel
Publication year - 1995
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.1995.tb00066.x
Subject(s) - economics , lift (data mining) , free trade , international trade , trade barrier , international economics , international free trade agreement , nash equilibrium , microeconomics , computer science , data mining
This paper develops a noncooperative Nash model in which a closed border is opened to trade between countries that differ in size and transportation costs. the paper suggests an explanation as to why economists have not convinced policymakers to lift all barriers to free trade. the questions we pose are: Who will gain as a result of opening the borders? Is free trade beneficial to the two parties involved? Do they both share equally in the fruits of free trade? Which country, large or small, benefits most? It is shown that free trade is not beneficial to both countries.