The Role of Quality Ladders in a Ricardian Model of Trade with Nonhomothetic Preferences

Esteban Jaimovich and Vincenzo Merella

No 81, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: The literature on North-South trade has explored conditions under which international trade might be a factor magnifying income disparities between the advanced North and the backward South. Little attention has yet been placed on the effect of trade on countries that do not display substantial dissimilarities concerning capital endowments. We show that even when no single country is technologically more advanced than any other one and productivity changes are uniform and identical in all countries, international trade may still be a source of income divergence. Income divergence will be experienced when comparative advantages induce patterns of specialisation that, although optimal for each country at some initial point in time, do not offer the same scope for improvements in terms of subsequent quality upgrading of final products.

Keywords: International Trade; Quality Ladders; Nonhomothetic Preferences (search for similar items in EconPapers)
JEL-codes: F11 F43 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2008
New Economics Papers: this item is included in nep-upt
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.carloalberto.org/wp-content/uploads/2018/11/no.81.pdf (application/pdf)

Related works:
Working Paper: The role of quality ladders in a Ricardian model of trade with nonhomothetic preference (2009)
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:cca:wpaper:81

Access Statistics for this paper

More papers in Carlo Alberto Notebooks from Collegio Carlo Alberto Contact information at EDIRC.
Bibliographic data for series maintained by Giovanni Bert ().