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Increasing Returns and International Trade

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  • Murray C. Kemp
  • Koji Shimomura

Abstract

The paper develops a model of international trade with increasing returns toscale by taking into account the possibility of cooperation among agents in an egalitarian economy. It is shown that each country gains from trade in a trading world in which there are arbitrary numbers of increasing‐returns‐to‐scale goods, constant‐returns‐to‐scale goods, factors of production, and countries.

Suggested Citation

  • Murray C. Kemp & Koji Shimomura, 2000. "Increasing Returns and International Trade," Review of International Economics, Wiley Blackwell, vol. 8(4), pages 614-618, November.
    • Handle: RePEc:bla:reviec:v:8:y:2000:i:4:p:614-618
    DOI: 10.1111/1467-9396.00245
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    Cited by:

    1. Wilfred J. Ethier & Roy J. Ruffin, 2008. "External Economies of Scale and Comparative Advantage," PIER Working Paper Archive 08-008, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.

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