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Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model

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  • Suga, Nobuhito
  • Hisanaga, Makoto

Abstract

This paper investigates trade patterns and the gains from trade in a Chamberlinian-Ricardian model with a CES type of upper-tier utility function. It is shown that a strong tendency toward complete specialization emerges under free trade and that free trade is preferable to autarky from the viewpoint of each country’s welfare. This paper also considers the trade regime called semi-autarky, in which one sector is under free trade, while the other is closed. The analysis demonstrates that free trade does not necessarily attain higher welfare in all countries relative to semi-autarky if cross-sector substitution in consumption is elastic.

Suggested Citation

  • Suga, Nobuhito & Hisanaga, Makoto, 2014. "Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model," Discussion paper series. A 267, Graduate School of Economics and Business Administration, Hokkaido University.
    • Handle: RePEc:hok:dpaper:267
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    File URL: http://hdl.handle.net/2115/54925
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    File URL: https://eprints.lib.hokudai.ac.jp/dspace/bitstream/2115/54925/3/DPA267.pdf
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    References listed on IDEAS

    as
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    Keywords

    Chamberlinian-Ricardian model; Trade patterns; Gains from trade;
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