Predicting the Pattern of International Trade in the Neoclassical Model: A Synthesis
AbstractI propose a framework that takes a set of conceivable outcomes as the primitive and a prediction is defined by identifying a subset on the set of conceivable outcomes. This notion of predictability serves as an organizing principle for characterizing pattern of trade predictions in single economy and integrated equilibrium formulations of the neoclassical trade model. I identify allocative efficiency as the unifying subset selection criterion for the different formulations of the neoclassical trade model, ranging from Ricardo’s (1817) original comparative advantage formulation to the multi-cone Heckscher-Ohlin specification with multiple countries, goods and factors.
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Bibliographic InfoPaper provided by University of Nottingham, GEP in its series Discussion Papers with number 08/24.
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Predictability; pattern of trade; neoclassical model;
Other versions of this item:
- Daniel Bernhofen, 2009. "Predicting the pattern of international trade in the neoclassical model: a synthesis," Economic Theory, Springer, vol. 41(1), pages 5-21, October.
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
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