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Measurable dynamic gains from trade
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Measurable dynamic gains from trade
Productive factors, such as human and physical capital, accumulate, and trade policy can affect their steady-state levels. Consequently, in addition to the usual static effects, trade liberalization has dynamic effects on output and welfare as the economy moves to its new steady state. The output impact of this dynamic effect is measurable and appears to be quite large. The welfare impact of this dynamic effect is also measurable. The size of th…
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