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Comparative Advantage and Trade Liberalization in a Chamberlinian-Ricardian Model

Author

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  • Kikuchi, Toru
  • Shimomua, Koji

Abstract

The present note shows the interaction between technological differences between countries and the level of trade costs as a determinant of trade patterns. It takes the work of Kikuchi et al.(2008)'s Chamberlinian-Ricardian model as its point of departure, and extends the analysis to include both a continuum of industries, as did Dornbusch et al. (1977), and iceberg transport costs. It will be shown that trade liberalization drastically changes the nature of trade patterns, particularly the emergence of intra-industry trade.

Suggested Citation

  • Kikuchi, Toru & Shimomua, Koji, 2008. "Comparative Advantage and Trade Liberalization in a Chamberlinian-Ricardian Model," MPRA Paper 8199, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8199
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    References listed on IDEAS

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    1. J. Peter Neary, 2003. "Competitive versus Comparative Advantage," The World Economy, Wiley Blackwell, vol. 26(4), pages 457-470, April.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-839, December.
    4. Toru Kikuchi & Koji Shimomura & Dao‐Zhi Zeng, 2008. "On Chamberlinian‐Ricardian Trade Patterns," Review of International Economics, Wiley Blackwell, vol. 16(2), pages 285-292, May.
    5. Helpman, Elhanan, 1981. "International trade in the presence of product differentiation, economies of scale and monopolistic competition : A Chamberlin-Heckscher-Ohlin approach," Journal of International Economics, Elsevier, vol. 11(3), pages 305-340, August.
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    JEL classification:

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

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