Explaining Import Variety and Quality : the Role of the Income Distribution

@inproceedings{Choi2006ExplainingIV,
  title={Explaining Import Variety and Quality : the Role of the Income Distribution},
  author={Yo Chul Choi and David Hummels and Chong Xiang},
  year={2006}
}
In this paper we examine whether a generalized version of Flam and Helpman’s (1987) model of vertical differentiation can reconcile three facts. One, countries import only a subset of available varieties. Two, import prices vary across exporters within narrow product categories. Three, US growth in both import variety and import price dispersion has occurred at the same time that the US income distribution has significantly widened. The generalized model maps cross-country differences in income… CONTINUE READING
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