Technological Improvements and Comparative Advantage Reconsidered

11 Pages Posted: 29 Sep 2006  

Yochanan Shachmurove

City University of New York, CUNY City College of New York - Department of Economics; The University of Pennsylvania - Department of Economics

Uriel Spiegel

Bar-Ilan University - Department of Management

Date Written: September 2006

Abstract

Given a world consisting of two countries, two commodities, and two consumers, this paper analyzes the potential effects of the current global trend of shifting world productions with regards to consumer goods. When technological improvements occur in a developing country, would terms of trade remain favorable for a developed country? Would both countries benefit? Instances where one or both countries benefit are feasible. However the developed country may lose as a result of an improvement in the production of the good that previously had been exported by the developed country.

Keywords: International trade, Samuelson, autarky equilibrium, comparative advantage, endowment shock

JEL Classification: F0, F1, O, O1, O3, D51

Suggested Citation

Shachmurove, Yochanan and Spiegel, Uriel, Technological Improvements and Comparative Advantage Reconsidered (September 2006). PIER Working Paper No. 06-023. Available at SSRN: https://ssrn.com/abstract=933647 or http://dx.doi.org/10.2139/ssrn.933647

Yochanan Shachmurove (Contact Author)

City University of New York, CUNY City College of New York - Department of Economics ( email )

160 Convent Avenue
New York, NY 10031
United States
212-650-6202 (Phone)

The University of Pennsylvania - Department of Economics ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-1090 (Phone)
215-573-2057 (Fax)

Uriel Spiegel

Bar-Ilan University - Department of Management ( email )

Ramat-Gan, 52900
Israel
011-972-3-5318282 (Phone)
+972.3.535.3329 (Fax)

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