Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model
AbstractThis 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.
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Bibliographic InfoPaper provided by Graduate School of Economics and Business Administration, Hokkaido University in its series Discussion paper series. A with number 267.
Length: 47 pages
Date of creation: Mar 2014
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Chamberlinian-Ricardian model; Trade patterns; Gains from trade;
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