Preferences, Country Bias and International Trade

REVIEW OF INTERNATIONAL ECONOMICS

Posted: 21 Mar 1997

See all articles by Santanu Roy

Santanu Roy

Southern Methodist University (SMU) - Department of Economics

Jean-Marie Viaene

Erasmus University

Abstract

The paper analyzes international trade in a Ricardian world where consumer preferences exhibit country bias. In particular, consumers differentiate between identical physical goods by country of manufacture. Unlike the classical Ricardian model, the pattern of international specialization in production depends on the preference structure. Possible equilibrium configurations include ones where both countries specialize incompletely and trade in both commodities, as well as situations where the pattern of specialization and trade is exactly the reverse of that in the classical Ricardian world. Both inter-industry and intra-industry trade can occur simultaneously though there are no market imperfections or scale economies.

JEL Classification: F11

Suggested Citation

Roy, Santanu and Viaene, Jean-Marie, Preferences, Country Bias and International Trade. REVIEW OF INTERNATIONAL ECONOMICS, Available at SSRN: https://ssrn.com/abstract=4760

Santanu Roy (Contact Author)

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States

Jean-Marie Viaene

Erasmus University ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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