MONOPOLISTIC COMPETITION WITH EFFICIENCY GAPS AND A HECKSCHER‐OHLIN TRADE PATTERN*

We develop a two‐factor, three‐sector model of international trade in which the monopolistically competitive firms are characterized by different fixed production costs. We show that, depending on the pattern of the international distribution of factor endowments, the trade pattern is determined not only by relative factor endowments as suggested by Heckscher and Ohlin, but also by absolute factor endowments via a mechanism of competitive selection in the monopolistically competitive sector.     

HOME MARKET EFFECT AND TRADE COSTS*

Concerning industrial location, the home market effect (HME) predicts that a large country is a net exporter of industrial goods. Recent literature shows that high transport costs in the traditional sector may obscure the HME in an early model of two sectors à la Helpman and Krugman. This paper presents an alternative model that displays the relationship between the HME and arbitrary transport costs while allowing for the derivation of analytical results by simple algebra. Our results show that the transport costs in the traditional sector do not obscure the HME but constitute a dispersion force that decreases the impact of the HME.     

SHIFT WORKING AND TRADE IN LABOUR SERVICES WITH TIME ZONE DIFFERENCES

Using a two‐factor (labour and capital), two‐good (shift‐working and non‐shift‐working commodities) model with two countries (Home and Foreign), which are located in different time zones, we highlight the impact of trade in labour services (via communications networks) on the comparative advantage of countries capable of such trade. It is shown that a comparative advantage in a shift‐working commodity is held by pairs of countries in different time zones and connected through a good communication network. Concerning factor prices, if the shift‐working commodity is capital (respectively, labour) intensive, the wage rate for day‐shift labour will decrease (respectively, increase) as a result of trade in labour services. It is also demonstrated that this labour service utilization is mutual: some of Home's day‐shift labour will be utilized for the Foreign night shift, and vice versa. Thus, periodic trade in labour services occurs across countries.     

亚洲经营模式的创造——以直升飞机效应为目标的全球经营战略的现状

日本与中国、韩国没有自由贸易协定,但是三国之间的贸易存在各种各样的问题。因此,对于三个国家的贸易环境维护像是通过很长很暗的隧道那样一种状态,解决这个问题具有战略意义,但必须采取必要的手段来维护三国间的互惠关系。     

Capital Bubbles,Interest Rates,and Investment in a Small Open Economy

We model a bubble in a productive asset (capital) on an explosive path, which diverges from the fundamental equilibrium and bursts with a positive probability. When the bubble grows, the small open economy borrows from the the world economy to finance investment and production, and banks charge the risk of the bubble bursting as an interest rate spread to debtors. Consequently, the interest rate spread widens as loans are increasingly backed by the bubble. When the bubble bursts, defaults cause a sudden stop of credit inflow from the world economy, investment falls, and the interest rate spread vanishes.