Explaining the Volume of North-South Trade
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.
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Volume (Year): 100 (1990)
Issue (Month): 403 (December)
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