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Intra-industry and inter-industry trade through the lens of comparative and absolute advantage

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  • A. Gnidchenko

Abstract

The article surveys the literature that emphasizes the importance of comparative and absolute advantages for intra- and inter-industry trade. Two conclusions follow form the survey. First, unlike the traditional view, intra-industry trade is determined rather by technology than by increasing returns. Second, absolute advantages that have been ignored in international trade models for a long time play a vital role through their linkages with product quality and export diversification. We also discuss a new strand of literature that models international trade with the assumption of non-homothetic preferences.

Suggested Citation

  • A. Gnidchenko, 2016. "Intra-industry and inter-industry trade through the lens of comparative and absolute advantage," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 10.
    • Handle: RePEc:nos:voprec:y:2016:id:242
    DOI: 10.32609/0042-8736-2016-10-112-128
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