Abstract
This paper examines the resource allocation and welfare effects of international trade when a nation is composed of distinct regions and capital is mobile interregionally. The introduction of capital mobility significantly alters the regional consequences of free trade. It is shown, for example, that it is possible that the source of the nation's export expansion is the region that is at a technological disadvantage in the production of the export good. Also, that region whose comparative advantage coincides with that of the nation as a whole may see its welfare decrease with free trade.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
