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Comparative Advantage and Trade Patterns

Author

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  • Broll, Udo
  • Gilroy, Bernard Michael

Abstract

In the pure theory of international trade the foundation of commodity exchange is based upon differences in autarky relative prices. The theory of comparative advantage attempts to precisely define this foundation by formulating a systematic relationship between the pattern of comparative advantages and the combination of international commodity trade. The purpose of this paper is to demonstrate the validity of a weak form of the law of comparative advantage, that is, that the pattern of international trade is determined by comparative advantage. The following elucidates the relationship between comparative advantages and international trade patterns with the aid of the revenue and expenditure function, the so-called duality approach.

Suggested Citation

  • Broll, Udo & Gilroy, Bernard Michael, 1986. "Comparative Advantage and Trade Patterns," MPRA Paper 18155, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18155
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    File URL: https://mpra.ub.uni-muenchen.de/18155/1/MPRA_paper_18155.pdf
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    References listed on IDEAS

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    1. Alan V. Deardorff, 2011. "The General Validity of the Law of Comparative Advantage," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 10, pages 73-90, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Gilroy, Bernard Michael & Broll, Udo, 1988. "International Cooperation and Intra-Industrial Transactions," MPRA Paper 18705, University Library of Munich, Germany.
    2. Gilroy, Bernard Michael, 1987. "The role of intra-firm trade," MPRA Paper 18039, University Library of Munich, Germany.

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    More about this item

    Keywords

    Comparative advantage; international trade;

    JEL classification:

    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • F1 - International Economics - - Trade

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