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Author: | Cuñat, A. Maffezzoli, M. |
Title: | Can comparative advantage explain the growth of US trade? |
Journal: | Economic Journal
2007 : APR, VOL. 117:520, p. 583-602 |
Index terms: | comparative advantage growth trade USA |
Language: | eng |
Abstract: | This study presents a dynamic comparative advantage model in which moderate reductions in important tariffs can generate sizable increases in trade volumes over time. A fall in tariffs has two effects: 1) for given factor endowments, it raises the degree of specialisation, leading to a larger volume of trade in the short run and 2) it raises the factor price of each country's abundant factor, leading to diverging paths of relative factor endowments and a rising degree of specialisation. |
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