Different Models in the International Trade

Abstract

The thesis aims to analyze different models for the international trade and their different implications. First and foremost, models using separate indirect utility, such as Bertoletti-Etro 2013, lead to different conclusions for the international trade with respect to models characterized by separable direct utility, such as Dixit-Stiglitz model. Different endings may be found when the role of per-capita income is analyzed in the international trade framework. In particular, models characterized by non homotetic directly additive preference a la Dixit-Stiglitz conclude that changes in consumers income or expenditure do not affect the firms' markups or their market size. Finally, the employment of new models which deal with monopolistically-competitive firms, heterogenous productivity and addilog preferences, shows as firms demand higher prices in richer countries, they do not impose different price according to different market size and the margin form trade that they obtain are lower in richer destinations but higher in far-flung countries.