The gains from the division of labour and comparative advantage
This paper develops a model of international trade based on comparative advantage and the division of labour. Comparative advantage in intermediate goods determines the extent of the division of labour, while the division of labour and comparative advantage in final goods lead to gains from trade. Labour is used to produce traded intermediate inputs which are used in the production of traded final goods; therefore trade is both inter- and intra-industry in nature. Large countries export a smaller share of final goods and a larger share of intermediate goods than small countries. These predictions find supportive evidence in the data.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: LANCASTER LA1 4YX|
Phone: +44 (1524) 594601
Fax: +44 (1524) 594244
Web page: http://www.lancaster.ac.uk/lums
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
- Gene M. Grossman & Esteban Rossi-Hansberg, 2008.
"External Economies and International Trade Redux,"
NBER Working Papers
14425, National Bureau of Economic Research, Inc.
- Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
- Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers Archive 11375, Iowa State University, Department of Economics.
- SÃ©bastien Miroudot & Rainer Lanz & Alexandros Ragoussis, 2009. "Trade in Intermediate Goods and Services," OECD Trade Policy Papers 93, OECD Publishing.
- Davis, Donald R., 1995. "Intra-industry trade: A Heckscher-Ohlin-Ricardo approach," Journal of International Economics, Elsevier, vol. 39(3-4), pages 201-226, November.
- Chaney, Thomas & Ossa, Ralph, 2013.
"Market size, division of labor, and firm productivity,"
Journal of International Economics,
Elsevier, vol. 90(1), pages 177-180.
- Chaney, Thomas & Ossa, Ralph, 2012. "Market Size, Division of Labor, and Firm Productivity," CEPR Discussion Papers 9069, C.E.P.R. Discussion Papers.
- Thomas Chaney & Ralph Ossa, 2012. "Market Size, Division of Labor, and Firm Productivity," NBER Working Papers 18243, National Bureau of Economic Research, Inc.
- Ethier, Wilfred, 1979. "Internationally decreasing costs and world trade," Journal of International Economics, Elsevier, vol. 9(1), pages 1-24, February.
- Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
When requesting a correction, please mention this item's handle: RePEc:lan:wpaper:33867696. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giorgio Motta)
If references are entirely missing, you can add them using this form.