1 The HOS model in a small open economy - Gregory Corcos
Consider a small open economy producing two goods (i = 1,2) out of two production factors (labor ... Firms are perfectly competitive on the two good markets and on the ... 2. (kâk2 kâk1. ) . Suppose that consumers' utility functions are such that ...
Master EPP, Eco-572 International Economics PC 2 Specialization and Factor Endowments
1
The HOS model in a small open economy
Consider a small open economy producing two goods (i = 1, 2) out of two production factors (labor and capital). Capital and labor are mobile across industries within a country, but they are not mobile internationally. The country is endowed with a combination (K, L) of capital and labor and technology is embedded in the following production functions (for goods 1 and 2, respectively): Y1 = f1 (K1 , L1 ) = K1α L1−α 1
Feb 29, 2012 - Everything else being equal, a 1% rise in p(Ï) reduces demand q(Ï) by ... For exporting firms, there are two decision variables (domestic price ...
Oct 22, 2014 - Openness. Intertemporal Models ... The Neoclassical Model of International Trade. 3. International Trade .... the Solow model predicts that capital has a higher return in. South .... symptom of low productivity growth symptom of ...
Sep 10, 2014 - The theory of comparative advantage. 2. The neo-classical .... security barrier (insecurity associated with contractual enforcement problems and ...
Sep 17, 2014 - In the Ricardian model of Lecture 1, trade patterns come from differences in the ... Assumptions ... Free trade, no transportation costs. Results.
Nov 9, 2016 - costs, specialization, intermediates, product differentiation. Recent research ... hybrid HO model with monopolistic competition and trade costs.
III - Factor Proportions: the. Heckscher-Ohlin Model. â Differences in factor abundance, not technology, create gains from trade. ..... Definition: good Y is relatively capital intensive and good X ..... Trade - Theory and Evidence, Mc Graw-Hill.
Alternatively, other conjectures focus on the demand side of trade: a disproportionate fall in the demand for tradable goods in most OECD countries (Eaton et al., ...
How well does the theory of the firm explain the choice between intrafirm vs arms' ... an explicit contract-theoretical approach of multinationals.2 This rapidly ...
Nov 7, 2014 - Perfect competition implies that the price consumers in country n actually pay for good j is the lowest across all sources i: pn(j) = min{pni(j);i = 1.
in the short run, some factors are mobile across sectors, others not: ... Specific factors model â short-run. 1 ... Closed economy labor market equilibrium for given.
Feb 2, 2011 - selling small quantities to a single neighbor country, and yet almost half of them ... Those who survive, on the other hand, tend to expand their presence ..... .soton.ac.uk/staff/calvo/documents/Technical_Addendum_2.pdf. 6 ...
implies that a country must be a net importer of one good ..... In the case of very large country size differences, the world ... International Trade - Theory and.
2: Cournot competition on homogenous products and segmented markets (Brander [1981]) .... variable mark-up (contrary to DSK). â the mark-up decreases with ...
Standard Trade Models Under Imperfect Competition. 8. Strategic ..... Transportation and Communication costs over the 20th century .... critical assumptions.
in a large country the shift in demand from good X to good Y is enough to cause .... (if same size, demand elasticity and tariff) .... International Trade - Theory and.
as the decision to shift profits is not limited by the divergent interests of ... pricing are less sensitive to corporate tax rates since they can shift profit earned in a ... 2An overview of the most widely-used methods to detect abusive transfer ..
Sep 29, 2016 - loop: they have a clear purpose which attracts creative ... It is harder than ever to understand Italy's Five Star · Movement ... women pas.
Sep 10, 2014 - Extensions and Limits. Lecture 1: The Theory of Comparative Advantage ... A country is said to have a comparative advantage in the production of one good if its ..... No impact of market size on trade patterns. No impact of ...
Oct 12, 2016 - (export/domestic sales, international supply chain, etc.). .... Non-production wage .... Commerce mondial de services, Exportations, 1980-2002.
more elastic, as seems to be the case looking at business cycle frequency ... In our model, aggregate consumption determines the size of the market firms can ... knowledge, the open-economy dimension of automation has not been ..... Page 9 .... We co
Oct 19, 2016 - Ricardian Trade Theory: Bottom Line ... a country has comparative advantage in a good if to produce it, less .... Increase in size of one country.
