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Vanek-Reinert Effect as a Corollary of Ricardo’s Comparative “Advantage”: a Simple Numerical Illustration

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  • Spirin, Victor

Abstract

Proponents of free trade contend that trade liberalization benefits all participants, regardless of whether the country is advanced or developing. There is another benefit to free trade, some economists argue, specifically for the developing nations. According to these economists, the trade-liberalizing developing country will benefit from technology transfer from advanced countries. Here we aim to provide a simple illustration that both these arguments are in direct contradiction with a basic economic optimization principle – and the canonical foundation of international trade – specialization by Ricardo’s comparative advantage.

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  • Spirin, Victor, 2021. "Vanek-Reinert Effect as a Corollary of Ricardo’s Comparative “Advantage”: a Simple Numerical Illustration," MPRA Paper 108548, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108548
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    File URL: https://mpra.ub.uni-muenchen.de/108548/1/MPRA_paper_108548.pdf
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    Citations

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    Cited by:

    1. Spirin, Victor, 2022. "Specific Factors Model When Countries Have Different Technologies: Why Inefficient Industry is Better Than no Industry at All," MPRA Paper 112937, University Library of Munich, Germany.
    2. Spirin, Victor, 2023. "Основное Уравнение Международной Экономики: Верховенство Закона + Иностранные Инвестиции + Свободная Торговля = Страна-Бензоколонка [The Fundamental Equation of International Economy: Rule of Law +," MPRA Paper 118386, University Library of Munich, Germany.
    3. Spirin, Victor, 2023. "Увеличение Разрыва Цен Факторов Производства В Модели Хекшера-Олина В Случае Различающегося Уровня Технологий: Простая Численная Иллюстрация [Factor price divergence in Heckscher-Ohlin model when c," MPRA Paper 116304, University Library of Munich, Germany.
    4. Spirin, Victor, 2022. "Factor price divergence in Heckscher-Ohlin model when countries have different technologies: a simple numerical illustration," MPRA Paper 115010, University Library of Munich, Germany.
    5. Victor, Spirin, 2022. "Выживание Простейшего: Европейский Союз Как Добровольно Принятый Восточной Европой План Моргентау. Уроки И Уникальная Возможность Для России [Survival of the Simplest: European Union as a Self-Impo," MPRA Paper 112629, University Library of Munich, Germany.

    More about this item

    Keywords

    International Trade; Comparative Advantage; Constrained Optimization; Vanek-Reinert Effect;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F6 - International Economics - - Economic Impacts of Globalization
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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