Comparative Advantages and Demand in the New Competitive Ricardian Models

Carlos A. Cinquetti

Foreign Trade Review, 2018, vol. 53, issue 1, 29-48

Abstract: We survey the new Ricardian models of bilateral trade, which are seen as tractable structure for multi-country trade models addressing either cost or demand linkages to trade. Cost-based Ricardian models advance new forms of comparative advantages that are irrespective of autarky price and, in some cases, even of opportunity cost. A less noticed feature is their reliance in demand function that does not disturb cost-based prices. Demand-based Ricardian models hinge especially on non-homothetic preferences for asymmetric goods and the supply-side ordering of goods mirrors the demand-side ordering. We also critically discuss extensions of these latter competitive models to trade in quality. We further seek to identify all these models vis-à -vis the Ricardo–Haberler–Deardorff tradition. JEL: F10, 019, D5

Keywords: Ricardian models; multi-country economies; comparative advantages; demand; trade cost; non-homothetic preferences (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:sae:fortra:v:53:y:2018:i:1:p:29-48

DOI: 10.1177/0015732516681884

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