TY  - BOOK
AU  - Pandey,Manish
AU  - Whalley,John
ED  - National Bureau of Economic Research.
TI  - Social Networks and Trade Liberalization
T2  - NBER working paper series
PY  - 2004///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - September 2004; Hardcopy version available to institutional subscribers
N2  - We discuss how social considerations can affect the desirability of trade liberalization in a conventional small open economy model. We consider a representative family in which there are location specific network effects from interactions with other family members, such as joint consumption, joint emotional support, and coinsurance. The benefits an individual receives  from the network they participate in are nonlinearly related to the number of family members located in urban and rural areas. Family members choose whether to locate in urban or rural areas and average and marginal network benefits differ. With differential network effects in urban and rural areas, in a model with traded urban and rural goods, free trade will no longer be the best policy. We show this through a numerical example, and suggest that the conventional economists case for free trade may need to be more nuanced once social considerations of this type are taken into account
UR  - https://www.nber.org/papers/w10769
UR  - http://dx.doi.org/10.3386/w10769
ER  -