Indivisibilities in the Ricardian model of trade

Kwok Tong Soo ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops a Ricardian model of trade in which there are indivisibilities in both production and consumption. Indivisibilities give rise to new results compared to the standard model with perfectly divisible production and consumption. Production indivisibility may result in complete specialisation even in autarky, while consumption indivisibility may result in consumption heterogeneity even amongst ex ante identical consumers. Indivisibilities lead to efficiency losses relative to the perfectly divisible case.

Keywords: Ricardian model; CES preferences; indivisible production; indivisible consumption (search for similar items in EconPapers)
JEL-codes: F11 (search for similar items in EconPapers)
Date: 2014-07-02
New Economics Papers: this item is included in nep-int
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https://mpra.ub.uni-muenchen.de/57066/1/MPRA_paper_57066.pdf original version (application/pdf)

Related works:
Journal Article: Indivisibilities in the Ricardian model of trade (2017)
Working Paper: Indivisibilities in the Ricardian model of trade (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57066

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