CESifo Working Paper No . 387 December 2000 VERTICAL PRODUCT DIFFERENTIATION AND THE IMPORT DEMAND FUNCTION : THEORY AND EVIDENCE

@inproceedings{Malley2001CESifoWP,
  title={CESifo Working Paper No . 387 December 2000 VERTICAL PRODUCT DIFFERENTIATION AND THE IMPORT DEMAND FUNCTION : THEORY AND EVIDENCE},
  author={Jim Malley and Thomas Moutos},
  year={2001}
}
  • Jim Malley, Thomas Moutos
  • Published 2001
In this paper we use a model of vertical product differentiation to cast doubt on the general validity of the import demand function as specified in macroeconomic models. The empirical importance of our theoretical concerns is then examined with the aid of two hypotheses. According to the first hypothesis, an increase in domestic wages is expected to reduce the share in total imports for goods in which the domestic comparative advantage is in high quality varieties of these goods. The second… CONTINUE READING

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