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The volume of trade in the smallest Heckscher-Ohlin model

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  • K T Soo

Abstract

This paper develops the smallest model of international trade based on differences in factor endowments across countries. We use this model to clarify the result in Helpman and Krugman (1985) that relative country size does not matter for the volume of trade. Relative country size does matter for the volume of trade, holding relative endowments and the size of the world economy constant.

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Paper provided by Lancaster University Management School, Economics Department in its series Working Papers with number 570270.

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Date of creation: 2005
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Handle: RePEc:lan:wpaper:570270

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  1. Debaere, Peter, 2005. "Monopolistic competition and trade, revisited: testing the model without testing for gravity," Journal of International Economics, Elsevier, Elsevier, vol. 66(1), pages 249-266, May.
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