TY  - JOUR
AU  - Baldwin,Richard E.
AU  - Robert-Nicoud,Frederic
TI  - The Impact of Trade on Intraindustry Reallocation and Aggregate Industry Productivity: A Comment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10718
PY  - 2004
Y2  - August 2004
UR  - http://www.nber.org/papers/w10718
L1  - http://www.nber.org/papers/w10718.pdf
N1  - Author contact info:
Richard Baldwin
Cigale 2
1010 Lausanne
SWITZERLAND
Tel: 41-22-908-5900
E-Mail: rbaldwin@cepr.org

frederic robert-nicoud
University of Geneva
Université de Genève
24 rue du Général-Dufour
CH - 1211 Genève 4
frederic.robert-nicoud@unige.ch
E-Mail: frederic.robert-nicoud@unige.ch
AB  - Melitz (2003) demonstrates that greater trade openness raises industry productivity via a selection effect and via a production re-allocation effect. Our comment points out that the set-up assumed in the Melitz model displays a trade off between static and dynamic efficiency gains. That is, although freer trade improves industry productivity in a level sense, it harms it in a growth sense. To make this point as simply as possible, we introduce a slight modification to the model that endogenises the growth rate of industry productivity and we show that liberalisation slows growth.
ER  -