Vanek-Reinert Effect as a Corollary of Ricardo’s Comparative “Advantage”: a Simple Numerical Illustration

Victor Spirin

MPRA Paper from University Library of Munich, Germany

Abstract: Proponents of free trade contend that trade liberalization benefits all participants, regardless of whether the country is advanced or developing. There is another benefit to free trade, some economists argue, specifically for the developing nations. According to these economists, the trade-liberalizing developing country will benefit from technology transfer from advanced countries. Here we aim to provide a simple illustration that both these arguments are in direct contradiction with a basic economic optimization principle – and the canonical foundation of international trade – specialization by Ricardo’s comparative advantage.

Keywords: International Trade; Comparative Advantage; Constrained Optimization; Vanek-Reinert Effect (search for similar items in EconPapers)
JEL-codes: F1 F6 F63 (search for similar items in EconPapers)
Date: 2021-06-30
New Economics Papers: this item is included in nep-int
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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