American Economic Review: Vol. 93 No. 3 (June 2003)


Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter


AER - All Issues

AER Forthcoming Articles

Information, International Substitutability, and Globalization

Article Citation

Rauch, James E., and Vitor Trindade. 2003. "Information, International Substitutability, and Globalization ." American Economic Review, 93(3): 775-791.

DOI: 10.1257/000282803322157089


Improved information allows home firms to rule out more potential foreign trade partners in advance of attempting to form a match. The increased responsiveness to country wage or goods price differentials resulting from this better first cut causes the general-equilibrium elasticity of substitution between national labor forces or the Armington elasticity of substitution between domestic and imported output to increase. Further results include an increase in the elasticity of domestic labor demand, an increase in the extent to which reductions in conventional trade barriers equalize national wages, and reduced "natural protection" for domestic producers.

Article Full-Text Access

Full-text Article


Rauch, James E.
Trindade, Vitor

American Economic Review

Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)


AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals

AEA Member Login:

AEAweb | AEA Journals | Contact Us