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Indivisibilities in the Ricardian model of trade

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  • Soo, Kwok Tong

Abstract

This paper develops a Ricardian model of trade in which there are indivisibilities in both production and consumption. Indivisibilities give rise to new results compared to the standard model with perfectly divisible production and consumption. Production indivisibility may result in complete specialisation even in autarky, while consumption indivisibility may result in consumption heterogeneity even amongst ex ante identical consumers. Indivisibilities lead to efficiency losses relative to the perfectly divisible case.

Suggested Citation

  • Soo, Kwok Tong, 2014. "Indivisibilities in the Ricardian model of trade," MPRA Paper 57066, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57066
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    Cited by:

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    3. Toraubally, Waseem A., 2023. "Comparative advantage with many goods: New treatment and results," European Journal of Operational Research, Elsevier, vol. 311(3), pages 1188-1201.

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    More about this item

    Keywords

    Ricardian model; CES preferences; indivisible production; indivisible consumption;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade

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