This paper develops a general model of comparative advantage with two factors and a continuum of goods, which incorporates the Ricardian and Heckscher-Ohlin-Samuelson models as two special cases and which can illustrate how technology, factor endowments, world income, world prices, and demand...

A direct comparison is made between two models of intra-industry trade: the love-of-varieties model and the Armington model. The former is a textbook model that is theoretically appealing, but seldom used in applied studies of trade policy. The latter has been widely used in CGE modelling, but...

Is the real appreciation of the Chinese yuan essential for correcting global imbalances? The present study offers a new perspective to the debate by drawing upon the rich international experience embodied in World Bank's World Development Indicators database. We find that the price levels of...

In the late 1980s, Taiwan confronted a situation very similar to what China is facing today: heavy pressures for the domestic currency to appreciate. In 1986-1992, the new Taiwan dollar appreciated 58% against the US dollar after the authorities gave up foreign exchange market interventions in...

This paper incorporates a nontraded service sector into an otherwise neoclassical model of trade and growth. The author's model can explain why the relative price of services, the expenditure share of services, and the employment share of the service sector all tend to rise with the level of per...