Article thumbnail

Technical change in a Ricardian model of North-South trade with increasing returns to scale

By Michael Benarroch

Abstract

This paper examines the effect of a technical change on the pattern of North-South trade in the presence of increasing returns to scale in production. The model shows that if the North initially takes advantage of the economies of scale in advance of the South, the relative wage will be higher in the North, the North will specialize in goods with the highest economies of scale and the South in the remaining goods. A technical improvement in the South or a uniform technical improvement will make both countries better-off as long as the price of Southern goods falls. Likewise, a technical improvement in the North will lead to a welfare improvement in both countries without altering the pattern of comparative advantage.International trade, development, technical change, economies of scale,

DOI identifier: 10.1080/09638199800000011
OAI identifier:
Download PDF:
Sorry, we are unable to provide the full text but you may find it at the following location(s):
  • http://www.tandfonline.com/doi... (external link)
  • Suggested articles


    To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.