The Law of comparative Advantage without Social Utility Functions

Koji Shimomura and Kar-yiu Wong

Review of International Economics, 1998, vol. 6, issue 3, 401-06

Abstract: This paper derives sufficient conditions under which the Law of Comparative Advantage and the General Law of Comparative Advantage are true when the preferences of the trading countries may not be represented by "well-behaved" social utility functions. It shows that in the neoclassical framework with convex technologies, profit maximization and Walrus' Law, the laws of comparative advantage under a natural trade are still valid if either the General Law of Demand or the Weak Axiom of Revealed Preference holds, or if losers are compensated using lump-sum transfers or consumption taxes. Copyright 1998 by Blackwell Publishing Ltd.

Date: 1998
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Related works:
Working Paper: The Law of Comparative Advantage without Social Utility Functions (1998)
Working Paper: The Law of Comparative Advantage without Social Utility Functions (1998)
Working Paper: The Law of Comparative Advantage without Social Utility Functions (1995)
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