External Economies of Scale and International Trade: Further Analysis
نویسنده
چکیده
This paper examines the validity of the ̄ve fundamental theorems of international trade and some other issues in a general model of externality. The model allows the possibility of own-sector externality and cross-sector externality. This paper derives conditions under which some of these theorems are valid, and explains what the government may choose to correct the distortionary e®ects of externality. Conditions under which a economy with no optimality policies may gain from trade are also derived.
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