Inefficient Trade Patterns: Excessive Trade, Cross-Hauling, and Dumping
Working Paper No. 05-W03
Benjamin Eden
ABSTRACT [article]
I study an example of a competitive environment in which trade occurs in a sequential manner. In this example, a country with a stable demand may
suffer from trade with a country with unstable demand, there may be too
much trade, a country may import and export the same good in the same
period (cross-hauling) and dumping may occur. The assumption about the
timing of delivery is critical for our results. When delivery occurs before
trade (delivery to stocks) trade improves welfare, there is dumping but no
cross-hauling. When delivery occurs after trade (delivery to order), trade
may reduce welfare, cross-hauling may occur but dumping does not occur.
Keywords and Phrases: Cross-hauling, dumping, excessive trade, sequential trade
JEL Classification Number: F10