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Long‐run Specialization *
Author(s) -
Ono Yoshiyasu,
Shibata Akihisa
Publication year - 2006
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.2006.00557.x
Subject(s) - economics , imperfect , preference , comparative advantage , division of labour , time preference , microeconomics , econometrics , international trade , market economy , philosophy , linguistics
Constructing a dynamic Heckscher–Ohlin model, we examine long‐run specialization patterns in the presence of international technological differences. Even a slight difference in technology causes at least one country to specialize. Either the case of perfect specialization in both countries or the case of perfect specialization in one country and imperfect specialization in the other occurs, depending on the subjective discount rate, relative preference for two commodities, labor endowments, and technological conditions. A necessary and sufficient condition for each case to hold is provided. Structural differences between the Ricardian model and ours are also emphasized.