Abstract
This paper examines the controversy involving international trade by employing a simple model. It analyzes the effects of unilateral technological improvements in one entity on the welfare of that entity and its trading partners. Improvements in one country are irreversible and lead to substantial welfare effects on its trading partner. The result reveals some unpleasant free trade arithmetic. However, the results do not suggest that the trade should be curtailed. Rather, the paper advocates a critical need to allocate additional resources in order to maintain their competitive edge in an era when economies are becoming increasingly integrated.
| Original language | English |
|---|---|
| Pages (from-to) | 956-964 |
| Number of pages | 9 |
| Journal | Economic Modelling |
| Volume | 33 |
| DOIs | |
| State | Published - Jul 2013 |
Keywords
- China
- Concealed technological improvements
- Distributive justice
- Gainers and losers from trade
- International trade
- Nash bargaining process
- Pareto improvements in production and consumption
- Rest of the world
- Samuelson
- Sleeping patents
- Technological improvements
- Terms of trade
- United States