TY - JOUR
T1 - A Ricardian model wuth a continuum of goods under nonhomothethic preferences
T2 - Demand complementaries, income distributiondistribution, and North-South trade
AU - Matsuyama, K.
PY - 2000
Y1 - 2000
N2 - This paper develops a Ricardian model of trade in which goods are indexed according to priority and higher-indexed goods are consumed only by richer households. South (North) has a comparative advantage in lower- (higher-) indexed goods and, hence, specializes in goods with lower (higher) income elasticities of demand. Product cycles and a southern terms-of-trade deterioration result from faster population growth and uniform productivity growth in South and a global productivity improvement. South's domestic income redistribution policy can improve its terms of trade so much that every household in South may be better off, at the expense of North.
AB - This paper develops a Ricardian model of trade in which goods are indexed according to priority and higher-indexed goods are consumed only by richer households. South (North) has a comparative advantage in lower- (higher-) indexed goods and, hence, specializes in goods with lower (higher) income elasticities of demand. Product cycles and a southern terms-of-trade deterioration result from faster population growth and uniform productivity growth in South and a global productivity improvement. South's domestic income redistribution policy can improve its terms of trade so much that every household in South may be better off, at the expense of North.
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U2 - 10.1086/317684
DO - 10.1086/317684
M3 - Article
AN - SCOPUS:0034503051
SN - 0022-3808
VL - 108
SP - 1093
EP - 1120
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 6
ER -