Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39719
Authors: 
Barbier, Edward B.
Rauscher, Michael
Year of Publication: 
2005
Series/Report no.: 
Thünen-series of applied economic theory 53
Abstract: 
This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural productivity) can have negative welfare implications for both countries. This outcome can result under three different scenarios: asymmetries across countries, i.e. a North-South model, a neoclassical labor market in the home country's instead of a Lewisian market, and alternative utility functions.
Subjects: 
international trade
labor surplus economy
land expansion
monopolistic competition
North-South model
JEL: 
F12
J61
O15
O18
Document Type: 
Working Paper

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