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A Dynamic Chamberlin-Heckscher-Ohlin Model with Endogenous Time Preferences: A Note

Author

Listed:
  • Iwasa, Kazumichi
  • Kikuchi, Toru
  • Shimomura, Koji

Abstract

This note formulates a dynamic two-country (developed and developing countries) Chamberlin-Heckscher-Ohlin model of trade with endogenous time preferences a la Uzawa (1968). We examine the relationship between initial factor endowment differences and trade patterns in the steady state. In particular, to highlight the integration of developing countries (e.g., China) into the world trading system, we concentrate on the case of asymmetric size of two countries (in terms of population). It will be shown that (i) given that the representative household in each country supplies an equal amount of labor, only intra-industry trade occurs in the steady state irrespective of differences in the number of representative households and that (ii) the number of households being equal, the country with less labor efficiency becomes the net exporter of the capital-intensive good.

Suggested Citation

  • Iwasa, Kazumichi & Kikuchi, Toru & Shimomura, Koji, 2007. "A Dynamic Chamberlin-Heckscher-Ohlin Model with Endogenous Time Preferences: A Note," MPRA Paper 4981, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:4981
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    References listed on IDEAS

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    More about this item

    Keywords

    trade patterns; dynamic trade model; endogenous time preferences;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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