Simulating the Constant Cost Trade Model

Nazif Durmaz and Henry Thompson

No auwp2024-03, Auburn Economics Working Paper Series from Department of Economics, Auburn University

Abstract: This paper simulates the constant cost trade model with labor inputs for three and five regions and products aggregated from the World Input-Output Database. The regions start with America, Asia, and Europe trading Resources, Manufactures, and Services. Each region maximizes Cobb-Douglas utility based on global consumption shares subject to balanced trade and global material balance. Simulated autarky and trade with the rest of the world lead to the full model with multiple potential equilibria. Diversified exports and import competition characterize the trade patterns with the gains from trade relative to autarky up to 20% for the five regions.

Keywords: comparative advantage; relative prices; simulation; constant cost trade (search for similar items in EconPapers)
JEL-codes: F10 F14 (search for similar items in EconPapers)
Date: 2024-02
New Economics Papers: this item is included in nep-cmp, nep-int, nep-sea and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cla.auburn.edu/econwp/Archives/2024/2024-03.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:abn:wpaper:auwp2024-03

Access Statistics for this paper

More papers in Auburn Economics Working Paper Series from Department of Economics, Auburn University Contact information at EDIRC.
Bibliographic data for series maintained by Hyeongwoo Kim (gmmkim@gmail.com).