Industrial Location: A Synthesis of Chamberlin and Ricardo
Pierre M. Picard
Centre de Recherche en Économie Appliquée (CREA); Universite du Luxembourg
Tohoku University - Graduate School of Information Sciences
May 18, 2006
CORE Discussion Paper No. 2006/55
This paper investigates the joint impact of Chamberlinian monopolistic competition and Ricardian comparative advantages on the structure of trade and industries. We develop a trade model with several industries employing local factors. We then investigate the structure of trade and industries as well as the possibilities of catastrophic changes and endogenous asymmetries in industry distribution. Three configurations are studied: multiple industries with local factor advantages at small trade costs, single industry with local factor advantage and two industries with comparative advantages for any trade costs. The last setting synthesizes the traditional results of Chamberlin and Ricardo.
Number of Pages in PDF File: 34
Keywords: Dispersion, comparative advantage, industrial specialization
JEL Classification: R10, R13, F12working papers series
Date posted: August 28, 2006
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