Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods.

This paper discusses Ricardian trade and payments theory in the case of a continuum of goods. The analysis thus extends the development of many-commodity, two-country comparative advantage analysis as presented, for example, in Gottfried Haberler (1937). Frank Graham (1923). Paul Samuelson (1964). a...

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Publicado en:American Economic Review Vol. 67; no. 5; pp. 823 - 840
Autores principales: Dornbusch, R., Fischer, S., Samuelson, P.A.
Formato: Artículo
Publicado: American Economic Association Dec77
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods.
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          Dornbusch, R.
          Fischer, S.
          Samuelson, P.A.
        affil: Massachusetts Institute of Technology
      su:
        Payment
        Economics
        Comparative advantage (International trade)
        Monetary policy
        Wages
      sug:
        subj:
          Payment
          Economics
          Comparative advantage (International trade)
          Monetary policy
          Wages
      ab: This paper discusses Ricardian trade and payments theory in the case of a continuum of goods. The analysis thus extends the development of many-commodity, two-country comparative advantage analysis as presented, for example, in Gottfried Haberler (1937). Frank Graham (1923). Paul Samuelson (1964). and Frank W, Taussig (1927), The literature is historically reviewed by John Chipman (1965). Perhaps surprisingly, the continuum assumption simplifies the analysis neatly in comparison with the discrete many-commodity case. The distinguishing feature of the Ricardian approach emphasised in this paper is the determination of the competitive margin in production between imported and exported goods. The analysis advances the existing literature by formally showing precisely how tariffs and transport costs establish a range of commodities that are not traded, and bow the price-specie flow mechanism does or does not give rise to movements in relative cost and price levels. The formal real model is introduced in Section I. Its equilibrium determines the relative wage and price structure and the efficient international specialization pattern. Section II considers standard comparative static questions of growth, demand shifts, technological change, and transfers. Extensions of the model to nontraded goods, tariffs, and transport costs are then studied in Section III. Monetary considerations are introduced in Section IV. which examines the price-specie mechanism under stable parities, floating exchange rate regimes, and also questions of unemployment under sticky money wages.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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