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| Author: | Copeland, B. R. Kotwal, A. |
| Title: | Product quality and the theory of comparative advantage |
| Journal: | European Economic Review
1996 : DEC, VOL. 40:9 , p. 1745-1760 |
| Index terms: | QUALITY PRODUCTS COMPARATIVE ADVANTAGE |
| Language: | eng |
| Abstract: | In the paper, a simple model is developed to investigate the possibility that two countries that differ significantly in income levels may not be able to gain from trading with each other. Two countries with identical preferences and different technologies are considered. There are two types of goods: One homogenenous, and one quality-differentiated. It is shown that if one country has an absolute advantage in both types of goods, then no trade may be possible btw. the two countries, in spite of differences in relative autarky prices. |
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