The gains from external scale economies and comparative advantage
AbstractThis paper develops a many-good, many-country model of international trade which combines comparative advantage and external scale economies. It is shown that the gains from external scale economies outweigh those from comparative advantage as the number of goods increases. Small countries gain more than large countries from trade, because large countries are more similar to the rest of the world than small countries. Small countries are also more specialised in production than large countries, despite the presence of external scale economies.
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Bibliographic InfoPaper provided by Lancaster University Management School, Economics Department in its series Working Papers with number 33867662.
Date of creation: 2013
Date of revision:
Other versions of this item:
- Kwok Tong Soo, 2014. "The gains from external scale economies and comparative advantage," Economics Bulletin, AccessEcon, vol. 34(1), pages 84-88.
- F1 - International Economics - - Trade
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-24 (All new papers)
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