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Explaining the Volume of North-South Trade

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  • Markusen, James R
  • Wigle, Randall M

Abstract

Much of the recent literature on scale economies has been motivated by the large volume of trade among the industrialized countries relative to "North-South" trade. This paper presents theoretical and empirical analyses of two alternative hypotheses, one based on differences in North versus South GNP and one based on higher protection levels in the South. Counter-factual experiments using a numerical general-equilibrium model support the hypotheses that North-South trade is relatively small because the South is poor and highly protected. Copyright 1990 by Royal Economic Society.

Suggested Citation

  • Markusen, James R & Wigle, Randall M, 1990. "Explaining the Volume of North-South Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1206-1215, December.
  • Handle: RePEc:ecj:econjl:v:100:y:1990:i:403:p:1206-15
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    Cited by:

    1. Donald R. Davis & David E. Weinstein, 1996. "Does Economic Geography Matter for International Specialization?," Harvard Institute of Economic Research Working Papers 1773, Harvard - Institute of Economic Research.
    2. Fritz Breuss & Jean Tesche, 1994. "A general equilibrium evaluation of trade and industrial policy changes in Austria and Hungary," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(3), pages 534-552, September.
    3. Pau Pujolas & Wyatt Brooks, 2013. "Trade Patterns, Income Differences and Gains from Trade," 2013 Meeting Papers 445, Society for Economic Dynamics.
    4. repec:ebl:ecbull:v:6:y:2004:i:9:p:1-12 is not listed on IDEAS
    5. Markusen, James R., 2013. "Putting per-capita income back into trade theory," Journal of International Economics, Elsevier, vol. 90(2), pages 255-265.
    6. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    7. Donald R. Davis & David E. Weinstein, 2001. "An Account of Global Factor Trade," American Economic Review, American Economic Association, vol. 91(5), pages 1423-1453, December.
    8. Arnade, Carlos Anthony, 1994. "Testing two trade models in Latin American agriculture," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 10(1), January.
    9. Nicolas PÉIDY, 2005. "Toward A Pan-Arab Free Trade Area: Assessing Trade Potential Effects Of The Agadir Agreement," The Developing Economies, Institute of Developing Economies, vol. 43(3), pages 329-345, September.
    10. Das, Gouranga G., 2007. "Intra-Industry Trade and Development: Revisiting Theory, Measurement and New Evidences," MPRA Paper 37260, University Library of Munich, Germany, revised 01 Sep 2008.
    11. Fidrmuc, Jarko, 1999. "Trade Diversion in the 'Left-Outs' in the Eastward Enlargement of the European Union," Transition Economics Series 8, Institute for Advanced Studies.
    12. Jun Ishii & Kei-Mu Yi, 1997. "The growth of world trade," Research Paper 9718, Federal Reserve Bank of New York.
    13. Eugene Bempong Nyantakyi & Steven Husted & Shuichiro Nishioka, 2015. "Trade Frictions and Market Access of Developing Countries: A Product-level Empirical Investigation," Review of International Economics, Wiley Blackwell, vol. 23(5), pages 924-945, November.
    14. Simone Juhasz Silva & Douglas Nelson, 2012. "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," The World Economy, Wiley Blackwell, vol. 35(5), pages 545-577, May.
    15. Trien T. Nguyen & Carlo Perroni & Randall M. Wigle, 1996. "Uruguay Round Impacts on Canada," Canadian Public Policy, University of Toronto Press, vol. 22(4), pages 342-355, December.
    16. Yongcheol Shin & Laura Serlenga, 2004. "Gravity Models of the Intra-EU Trade: Application of the Hausman-Taylor Estimation in Heterogeneous Panels with Common Time-specific Factors," Econometric Society 2004 Far Eastern Meetings 671, Econometric Society.
    17. Davis, Donald R., 1995. "Intra-industry trade: A Heckscher-Ohlin-Ricardo approach," Journal of International Economics, Elsevier, vol. 39(3-4), pages 201-226, November.
    18. Das, Gouranga G., 2002. "Cross-Country Analysis of Empirical Evidences of Intra-industry Trade in Manufactures for Dynamic Asian and Other Developing Economies: Implications for Economic Growth and Development," MPRA Paper 37916, University Library of Munich, Germany, revised 2002.
    19. repec:spr:jknowl:v:8:y:2017:i:3:d:10.1007_s13132-015-0279-y is not listed on IDEAS
    20. Ramezzana, Paolo, 2000. "Per capita income demand for variety, and international trade: Linder reconsidered," LSE Research Online Documents on Economics 20184, London School of Economics and Political Science, LSE Library.
    21. Javad Abedini & Nicolas Péridy, 2009. "The Emergence of Iran in the World Car Industry: An Estimation of its Export Potential," The World Economy, Wiley Blackwell, vol. 32(5), pages 790-818, May.

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