Multilateral comparative advantage: complex trade with many countries and goods

Henry Thompson

International Economics and Economic Policy, 2024, vol. 21, issue 1, No 11, 285-296

Abstract: Abstract This paper shows relative price competition based on comparative advantage leads to diversified production and complex trade patterns with complete specialization unlikely for many countries and goods. Focused on models with three and four countries and goods, the present analysis starts with the extreme countries in each relative price ranking trading those two goods. The terms of trade determine the directions of trade for middle countries in each ranking. The potential trade patterns prove realistic with multiple exports, nontraded goods, nontrading countries, separate trade groups, and two-way trade with exports and imports of the same good.

Keywords: Comparative advantage; Trade patterns (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10368-024-00586-z

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