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Domestic Trade And Transport Costs In International Trade Theory

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Author Info
DONALD J. ROUSSLANG

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Abstract

This paper examines the effects that domestic trade and transport margins have on international trade and the consequences for the central trade theorems. Specifically, the Heckscher-Ohlin-Samuelson model is expanded to include a third industry that produces the nontraded domestic services in transportation, warehousing, wholesaling and retailing required to market goods to final purchasers. It is found that the domestic margins probably impose substantial natural trade barriers and that they can cause the central trade theorems (factor-price equalization, Stolper-Samuelson, and Rybezynski) to fail. [F11]

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Publisher Info
Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 5 (1991)
Issue (Month): 2 (June)
Pages: 49-61
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Handle: RePEc:taf:intecj:v:5:y:1991:i:2:p:49-61

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  1. Don Fullerton, 1982. "On the Possibility of an Inverse Relationship between Tax Rates and Government Revenues," NBER Working Papers 0467, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. James R. Melvin, 1985. "The Regional Economic Consequences of Tariffs and Domestic Transportation Costs," Canadian Journal of Economics, Canadian Economics Association, vol. 18(2), pages 237-57, May. [Downloadable!] (restricted)
  3. Ray, Alok, 1975. "Traded and Nontraded Intermediate Inputs and Some Aspects of the Pure Theory of International Trade," The Quarterly Journal of Economics, MIT Press, vol. 89(2), pages 331-40, May. [Downloadable!] (restricted)
  4. Ronald W. Jones, 1965. "The Structure of Simple General Equilibrium Models," Journal of Political Economy, University of Chicago Press, vol. 73, pages 557. [Downloadable!] (restricted)
  5. Casas, F R, 1983. "International Trade with Produced Transport Services," Oxford Economic Papers, Oxford University Press, vol. 35(1), pages 89-109, March. [Downloadable!] (restricted)
  6. Falvey, Rodney E, 1976. "Transport Costs in the Pure Theory of International Trade," Economic Journal, Royal Economic Society, vol. 86(343), pages 536-50, September. [Downloadable!] (restricted)
  7. Ethier, Wilfred, 1972. "Nontraded Goods and the Heckscher-Ohlin Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 132-47, February. [Downloadable!] (restricted)
  8. Batra, Raveendra N & Casas, Francisco R, 1973. "Intermediate Products and the Pure Theory of International Trade: A Neo-Heckscher-Ohlin Framework," American Economic Review, American Economic Association, vol. 63(3), pages 297-311, June. [Downloadable!] (restricted)
  9. Jondrow, James M & Chase, David E & Gamble, Christopher L, 1982. "The Price Differential between Domestic and Imported Steel," Journal of Business, University of Chicago Press, vol. 55(3), pages 383-99, July. [Downloadable!] (restricted)
  10. James D. Reitzes & Donald J. Rousslang, 1988. "Domestic versus International Capital Mobility: Some Empirical Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 312-23, May. [Downloadable!] (restricted)
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