I would have called it “free trade is still quite good”

Our quantitative results suggest that both corrections are nonnegligible: trade-induced increases in inequality of disposable income erode about 20% of the gains from trade, while the gains from trade would be about 15% larger if redistribution was carried out via non-distortionary means.

That is part of a new paper from Pol Antràs, Alonso de Gortari, and Oleg Itskhoki, via Justin Wolfers.


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