Procompetitive Gains from Trade and Comparative Advantage

Albert Schweinberger

International Economic Review, 1996, vol. 37, issue 2, 361-75

Abstract: Having made the concepts of pro- or anticompetitive output changes precise, necessary and sufficient conditions for trade gains are derived under conditions of increasing returns to scale and imperfect competition in a general equilibrium model with any (finite) number of goods and factors. These conditions yield generalizations of the theorems of comparative advantage in goods and implicit factor trade (the factor content version of the H-O theorem). Other generalizations can be obtained if one assumes quasihomothetic preferences and that welfare effects are dominated by price rather than income effects. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1996
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Working Paper: Procompetitive gains from trade and comparative advantage (1991)
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