This paper develops a model of intermediate and final goods trade based on comparative advantage. Firms endogenously decide whether to produce a final good directly using labour, or indirectly using both labour and intermediate inputs. It is shown that the gains from trade in intermediate and...

This paper develops a model of international trade based on comparative<br/>advantage and the division of labour. Comparative advantage in intermediate<br/>goods determines the extent of the division of labour, while the division of labour<br/>and comparative advantage in final goods lead to gains from trade....

This paper develops a many-good, many-country model of international trade which combines Ricardian comparative advantage and increasing returns to scale. It is shown how the gains from trade depend on relative country sizes, trade cost, and the technological similarity between countries. Trade...

This paper develops a many-good, many-country model of international trade<br/>which combines comparative advantage and external scale economies. It is shown<br/>that the gains from external scale economies outweigh those from comparative<br/>advantage as the number of goods increases. Small countries gain...