An Elementary Theory of Comparative Advantage
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heterogeneity090105.pdf
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Author(s)
Costinot, Arnaud
Date Issued
July 2009
Journal
Econometrica : journal of the Econometric Society
Publisher
Econometric Society
Citation
Costinot, Arnaud. “An Elementary Theory of Comparative Advantage.” Econometrica 77.4 (2009): 1165-1192. (C)2009 The Econometric Society.
Version
Final published version
Abstract
Comparative advantage, whether driven by technology or factor endowment, is at
the core of neoclassical trade theory. Using tools from the mathematics of complementarity,
this paper offers a simple yet unifying perspective on the fundamental forces
that shape comparative advantage. The main results characterize sufficient conditions
on factor productivity and factor supply to predict patterns of international specialization
in a multifactor generalization of the Ricardian model which we refer to as
an “elementary neoclassical economy.” These conditions, which hold for an arbitrarily
large number of countries, goods, and factors, generalize and extend many results
from the previous trade literature. They also offer new insights about the joint effects
of technology and factor endowments on international specialization.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
http://dx.doi.org/10.3982/ecta7636
