International trade and the division of labour

Soo, Kwok Tong (2015) International trade and the division of labour. Working Paper. Lancaster University, Department of Economics, Lancaster.

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Abstract

This paper develops a model of international trade based on the division of labour under perfect competition. International trade, by eliminating the duplication of coordination costs, leads to a greater variety of intermediate goods, each produced at a larger scale than in autarky. The greater variety of intermediate inputs implies greater division of labour and hence gains from trade. Similarly to models of international trade under imperfect competition, the volume of trade depends on the relative sizes of the trading partners. Extending the model to two factors of production yields the additional result that if the two countries are sufficiently similar in their relative endowments, then both factors of production can experience gains from trade.

Item Type:
Monograph (Working Paper)
Subjects:
ID Code:
76984
Deposited By:
Deposited On:
04 Dec 2015 08:58
Refereed?:
No
Published?:
Published
Last Modified:
20 Oct 2020 00:00