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Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model

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  • Suga, Nobuhito
  • Hisanaga, Makoto

Abstract

This paper investigates trade patterns and the gains from trade in a Chamberlinian-Ricardian model with a CES type of upper-tier utility function. It is shown that a strong tendency toward complete specialization emerges under free trade and that free trade is preferable to autarky from the viewpoint of each country’s welfare. This paper also considers the trade regime called semi-autarky, in which one sector is under free trade, while the other is closed. The analysis demonstrates that free trade does not necessarily attain higher welfare in all countries relative to semi-autarky if cross-sector substitution in consumption is elastic.

Suggested Citation

  • Suga, Nobuhito & Hisanaga, Makoto, 2014. "Trade Patterns and the Gains from Trade in a Chamberlinian-Ricardian Model," Discussion paper series. A 267, Graduate School of Economics and Business Administration, Hokkaido University.
  • Handle: RePEc:hok:dpaper:267
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    File URL: http://hdl.handle.net/2115/54925
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    File URL: https://eprints.lib.hokudai.ac.jp/dspace/bitstream/2115/54925/3/DPA267.pdf
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    References listed on IDEAS

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    1. Toru Kikuchi & Koji Shimomura & Dao-Zhi Zeng, 2008. "On Chamberlinian-Ricardian Trade Patterns," Review of International Economics, Wiley Blackwell, vol. 16(2), pages 285-292, May.
    2. Venables, Anthony J, 1999. " The International Division of Industries: Clustering and Comparative Advantage in a Multi-industry Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 495-513, December.
    3. Toru Kikuchi & Koji Shimomura & Dao-Zhi Zeng, 2006. "On the Emergence of Intra-industry Trade," Journal of Economics, Springer, vol. 87(1), pages 15-28, January.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    5. Rikard Forslid & Ian Wooton, 2003. "Comparative Advantage and the Location of Production," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 588-603, September.
    6. Svetlana Demidova, 2008. "Productivity Improvements And Falling Trade Costs: Boon Or Bane?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1437-1462, November.
    7. Montagna, Catia, 2001. "Efficiency Gaps, Love of Variety and International Trade," Economica, London School of Economics and Political Science, vol. 68(269), pages 27-44, February.
    8. Kikuchi, Toru & Shimomura, Koji, 2007. "Monopolistic competition with cross-country technological differences and international trade," Japan and the World Economy, Elsevier, vol. 19(2), pages 236-247, March.
    9. Antonio Ricci, Luca, 1999. "Economic geography and comparative advantage:: Agglomeration versus specialization," European Economic Review, Elsevier, vol. 43(2), pages 357-377, February.
    10. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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    More about this item

    Keywords

    Chamberlinian-Ricardian model; Trade patterns; Gains from trade;

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