Comparative Advantage, Geographic Advantage, and the Volume of Trade
AbstractA functional relationship between the degree of a country?s comparative advantage in any good and the volume of its net exports of that good to its trading partner is established using a model with per-unit-distance transportation costs between countries' coasts and their interiors. The greater a country's comparative advantage, the greater the transportation cost it can overcome and hence the deeper its exports can penetrate geographically into its trading partner. The internal spatial structure of a country is modeled using cities as the basic spatial units. It is shown that the city closest to the coast will be the largest and have the highest wage rate and residential rental rates, and that population sizes, wage rates, and residential rental rates of cities all fall as one moves inland.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3512.
Date of creation: Nov 1990
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- Rauch, James E, 1991. "Comparative Advantage, Geographic Advantage and the Volume of Trade," Economic Journal, Royal Economic Society, vol. 101(408), pages 1230-44, September.
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