A General Model of Comparative Advantage with Two Factors and a Continuum of Goods
This paper develops a general model of comparative advantage with two factors and a continuum of goods, which incorporates the Ricardian and Heckscher-Ohlin-Samuelson models as two special cases and which can illustrate how technology, factor endowments, world income, world prices, and demand preferences influence trade pattern with a single graph. Further, the author has derived an intuitive solution of a unique trade pattern under factor price equalization: countries specialize in goods that use intensively abundant factors and some middle goods in terms of capital intensity are not traded even in the absence of trade barriers. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Volume (Year): 34 (1993)
Issue (Month): 2 (May)
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