A factor endowment theory of international trade under imperfect competition and increasing returns

2005 ◽  
Vol 38 (1) ◽  
pp. 273-289 ◽  
Author(s):  
Kenji Fujiwara ◽  
Koji Shimomura
Keyword(s):  
International Trade ◽  
Imperfect Competition ◽  
Increasing Returns ◽  
Factor Endowment

Intra-industry and inter-industry trade through the lens of comparative and absolute advantage

2016 ◽  
pp. 112-128
Author(s):  
A. Gnidchenko
Keyword(s):  
International Trade ◽  
Product Quality ◽  
Vital Role ◽  
Increasing Returns ◽  
Traditional View ◽  
Export Diversification ◽  
Industry Trade ◽  
Long Time ◽  
Absolute Advantage

The article surveys the literature that emphasizes the importance of comparative and absolute advantages for intra- and inter-industry trade. Two conclusions follow form the survey. First, unlike the traditional view, intra-industry trade is determined rather by technology than by increasing returns. Second, absolute advantages that have been ignored in international trade models for a long time play a vital role through their linkages with product quality and export diversification. We also discuss a new strand of literature that models international trade with the assumption of non-homothetic preferences.

Trade policy with increasing returns and imperfect competition

1988 ◽  
Vol 24 (3-4) ◽  
pp. 299-316 ◽  
Author(s):  
James R. Markusen ◽  
Anthony J. Venables
Keyword(s):  
Trade Policy ◽  
Imperfect Competition ◽  
Increasing Returns

scholarly journals TASTE FOR VARIETY AND ENDOGENOUS FLUCTUATIONS IN A MONOPOLISTIC COMPETITION MODEL

2008 ◽  
Vol 12 (4) ◽  
pp. 561-577 ◽  
Author(s):  
Thomas Seegmuller
Keyword(s):  
Imperfect Competition ◽  
Dynamic Models ◽  
Monopolistic Competition ◽  
Increasing Returns ◽  
Product Diversity ◽  
Endogenous Fluctuations ◽  
The Real ◽  
Imperfectly Competitive ◽  
Local Indeterminacy ◽  
Elastic Labor Supply

In past years, imperfect competition has been introduced in several dynamic models to show how markup variability, increasing returns (decreasing marginal cost), and monopoly profits affect the occurrence of endogenous fluctuations. In this paper, we focus on another possible feature of imperfectly competitive economies: consumers' taste for variety as a result of endogenous product diversity. Introducing monopolistic competition [Dixit and Stiglitz (1977), Benassy (1996)] in an overlapping generations model in which consumers have taste for variety, we show that local indeterminacy can occur under the three following conditions: a high substitution between capital and labor, increasing returns arbitrarily small, and a not too elastic labor supply. The key mechanism for this result is based on the fact that, because of taste for variety, the aggregate price decreases with the procyclical product diversity, which has a direct influence on the real wage and the real interest rate.

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