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Technical Improvements and Welfare under International Duopoly

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  • Masayuki Okawa

Abstract

It is now common wisdom that a free‐trading country with perfectly competitive markets might be hurt by its own technical improvement of that country's export industry, and that an improvement in the import‐competing industry never impoverishes the country if no commodity is inferior for that country. This paper examines the welfare effects of technical progress in a perfectly competitive industry and in an internationally duopolistic market in a two‐country, two‐good, one‐factor trading model. It will be shown that the above propositions are severely qualified in our setting with duopolistic industry.

Suggested Citation

  • Masayuki Okawa, 2009. "Technical Improvements and Welfare under International Duopoly," Review of International Economics, Wiley Blackwell, vol. 17(5), pages 1001-1008, November.
    • Handle: RePEc:bla:reviec:v:17:y:2009:i:5:p:1001-1008
    DOI: 10.1111/j.1467-9396.2008.00795.x
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    References listed on IDEAS

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    1. Geoffrey Fishburn & Murray C. Kemp, 2007. "Impoverishing Technical And Preferential Improvements," Pacific Economic Review, Wiley Blackwell, vol. 12(2), pages 205-212, May.
    2. Jagdish Bhagwati, 1958. "Immiserizing Growth: A Geometrical Note," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 25(3), pages 201-205.
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