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The Cournot-Ricardo Solution under Domestic Free Movement of Labour

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  • Alexandra M. Espinosa

    () (Escuela Politécnica Nacional)

Abstract

This paper analyses the properties of the Cournot-Ricardo solution if workers have incentives to move from low to high profit industries. By construction, these movements contribute to the improvement of the competitiveness of countries with free movement of labour, due to the increase in size of industries with a comparative advantage. However, in general, it is not sufficient to guarantee convergence to the Ricardo-Mill solution. In conclusion, under the inter-industry movement of labour, economies are more competitive, but specialisation might not coincide with that predicted by the Ricardo-Mill model.

Suggested Citation

  • Alexandra M. Espinosa, 2018. "The Cournot-Ricardo Solution under Domestic Free Movement of Labour," Journal of Industry, Competition and Trade, Springer, vol. 18(3), pages 295-302, September.
  • Handle: RePEc:kap:jincot:v:18:y:2018:i:3:d:10.1007_s10842-017-0258-z
    DOI: 10.1007/s10842-017-0258-z
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    References listed on IDEAS

    as
    1. Priscila Ferreira, 2019. "Market competition and executive pay," IZA World of Labor, Institute of Labor Economics (IZA), pages 115-115, February.
    2. Ruffin, Roy J., 1974. "International trade under uncertainty," Journal of International Economics, Elsevier, vol. 4(3), pages 243-259, August.
    3. E. Young Song & Chan‐Hyun Sohn, 2012. "Intra‐industry Trade and Industry Distribution of Productivity: A Cournot–Ricardo Approach," The World Economy, Wiley Blackwell, vol. 35(4), pages 461-482, April.
    4. Wilson, Charles A, 1980. "On the General Structure of Ricardian Models with a Continuum of Goods: Applications to Growth, Tariff Theory, and Technical Change," Econometrica, Econometric Society, vol. 48(7), pages 1675-1702, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Ricardo-Mill; Ricardo-Cournot; Intra-industry; Labour mobility;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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