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July 03, 2008

DeLong: Why We Should Presume Free Trade Is Win-Win: A Multisector Stolper-Samuelson Finger Exercise

J. Bradford DeLong (2008), "Why We Should Presume Free Trade Is Win-Win: A Multisector Stolper-Samuelson Finger Exercise"

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You prove that well balanced economies have little to fear from free trade. You also need to count how much free trade will expand for well balanced economies.

The greater the unbalance, the faster free trade grows because factors are inefficiently and free trade rebalances, and visa versa.

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