An Elementary Theory of Comparative Advantage
Comparative advantage, whether driven by technology or factor endowment, is at the core of neoclassical trade theory. Using tools from the mathematics of complementarity, this paper offers a simple yet unifying perspective on the fundamental forces that shape comparative advantage. The main resul...
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Format: | Article |
Language: | en_US |
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Econometric Society
2010
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Online Access: | http://hdl.handle.net/1721.1/51725 https://orcid.org/0000-0002-5503-297X |
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author | Costinot, Arnaud |
author2 | Massachusetts Institute of Technology. Department of Economics |
author_facet | Massachusetts Institute of Technology. Department of Economics Costinot, Arnaud |
author_sort | Costinot, Arnaud |
collection | MIT |
description | Comparative advantage, whether driven by technology or factor endowment, is at
the core of neoclassical trade theory. Using tools from the mathematics of complementarity,
this paper offers a simple yet unifying perspective on the fundamental forces
that shape comparative advantage. The main results characterize sufficient conditions
on factor productivity and factor supply to predict patterns of international specialization
in a multifactor generalization of the Ricardian model which we refer to as
an “elementary neoclassical economy.” These conditions, which hold for an arbitrarily
large number of countries, goods, and factors, generalize and extend many results
from the previous trade literature. They also offer new insights about the joint effects
of technology and factor endowments on international specialization. |
first_indexed | 2024-09-23T16:28:39Z |
format | Article |
id | mit-1721.1/51725 |
institution | Massachusetts Institute of Technology |
language | en_US |
last_indexed | 2024-09-23T16:28:39Z |
publishDate | 2010 |
publisher | Econometric Society |
record_format | dspace |
spelling | mit-1721.1/517252022-09-29T19:57:57Z An Elementary Theory of Comparative Advantage Costinot, Arnaud Massachusetts Institute of Technology. Department of Economics Costinot, Arnaud Costinot, Arnaud Comparative advantage, whether driven by technology or factor endowment, is at the core of neoclassical trade theory. Using tools from the mathematics of complementarity, this paper offers a simple yet unifying perspective on the fundamental forces that shape comparative advantage. The main results characterize sufficient conditions on factor productivity and factor supply to predict patterns of international specialization in a multifactor generalization of the Ricardian model which we refer to as an “elementary neoclassical economy.” These conditions, which hold for an arbitrarily large number of countries, goods, and factors, generalize and extend many results from the previous trade literature. They also offer new insights about the joint effects of technology and factor endowments on international specialization. 2010-02-11T19:14:58Z 2010-02-11T19:14:58Z 2009-07 2009-01 Article http://purl.org/eprint/type/SubmittedJournalArticle 0012-9682 http://hdl.handle.net/1721.1/51725 Costinot, Arnaud. “An Elementary Theory of Comparative Advantage.” Econometrica 77.4 (2009): 1165-1192. (C)2009 The Econometric Society. https://orcid.org/0000-0002-5503-297X en_US http://dx.doi.org/10.3982/ecta7636 Econometrica : journal of the Econometric Society Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf Econometric Society Arnaud Costinot |
spellingShingle | Costinot, Arnaud An Elementary Theory of Comparative Advantage |
title | An Elementary Theory of Comparative Advantage |
title_full | An Elementary Theory of Comparative Advantage |
title_fullStr | An Elementary Theory of Comparative Advantage |
title_full_unstemmed | An Elementary Theory of Comparative Advantage |
title_short | An Elementary Theory of Comparative Advantage |
title_sort | elementary theory of comparative advantage |
url | http://hdl.handle.net/1721.1/51725 https://orcid.org/0000-0002-5503-297X |
work_keys_str_mv | AT costinotarnaud anelementarytheoryofcomparativeadvantage AT costinotarnaud elementarytheoryofcomparativeadvantage |