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A General Model of Comparative Advantage with Two Factors and a Continuum of Goods

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  • Xu, Yingfeng

Abstract

This paper develops a general model of comparative advantage with two factors and a continuum of goods, which incorporates the Ricardian and Heckscher-Ohlin-Samuelson models as two special cases and which can illustrate how technology, factor endowments, world income, world prices, and demand preferences influence trade pattern with a single graph. Further, the author has derived an intuitive solution of a unique trade pattern under factor price equalization: countries specialize in goods that use intensively abundant factors and some middle goods in terms of capital intensity are not traded even in the absence of trade barriers. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

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Bibliographic Info

Article provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.

Volume (Year): 34 (1993)
Issue (Month): 2 (May)
Pages: 365-80

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Handle: RePEc:ier:iecrev:v:34:y:1993:i:2:p:365-80

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Cited by:
  1. Kei-Mu Yi, 2003. "Can Vertical Specialization Explain the Growth of World Trade?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 52-102, February.
  2. Donald R. Davis & David E. Weinstein, 1998. "An Account of Global Factor Trade," Harvard Institute of Economic Research Working Papers 1849, Harvard - Institute of Economic Research.
  3. Andrés Artal-Tur & Juana Castillo-Giménez & Carlos Llano-Verduras & Francisco Requena-Silvente, 2010. "The factor content of regional bilateral trade: the role of technology and demand," Working Papers 1007, Department of Applied Economics II, Universidad de Valencia.
  4. Bernstein, Jeffrey R. & Weinstein, David E., 2002. "Do endowments predict the location of production?: Evidence from national and international data," Journal of International Economics, Elsevier, vol. 56(1), pages 55-76, January.
  5. Davis, Donald R. & Weinstein, David E., 2003. "Why countries trade: Insights from firm-level data," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 432-447, December.
  6. Jiro AKITA & Kwan Koo YUN, 2004. "Technological Differences and the Impact of Trade on Wages," Econometric Society 2004 Far Eastern Meetings 757, Econometric Society.

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