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International Trade and Income Distribution

  • Yang, X.
  • Zhang, D.

This paper applies the inframarginal analysis, which is a combination of marginal and total cost-benefit analysis, to investigate the relationship between division of labor, the extent of the market, productivity, and inequality of income distribution. The model with transaction costs and exogenous and endogenous comparative advantages shows that as transaction conditions are improved, the general equilibrium discontinuously jumps from autarky to partial division of labor with a dual structure, then to the complete division of labor where dual structure disappears. In this process different groups of individuals with different transaction conditions get involved in a certain level of division of labor at different stages of development.

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Paper provided by Chicago - Graduate School of Business in its series Papers with number 18.

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Length: 27 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:chicbu:18
Contact details of provider: Postal:
UNIVERSITY OF CHICAGO, H.G.B. ALEXANDER FOUNDATION GRADUATE SCHOOL OF BUSINESS, CHICAGO ILLINOIS 60637 U.S.A.

Web page: http://gsb.uchicago.edu/

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  1. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, September.
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  19. Khandker, A. Wahhab & Rashid, Salim, 1995. "Wage subsidy and full-employment in a dual economy with open unemployment and surplus labor," Journal of Development Economics, Elsevier, vol. 48(1), pages 205-223, October.
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  28. repec:hhs:iuiwop:430 is not listed on IDEAS
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