Cheng, Wen Li; Liu, Meng-Chun; Yang, Xiaokai - In: The Economic Record 76 (2000) 233, pp. 172-82
This paper develops a Ricardian model with transaction costs and endogenous and exogenous comparative advantages. It shows that the level of division of labour and trade increases as transaction conditions improve. It identifies the conditions for trade negotiations that result in zero tariff...