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Endogenous vs. exogenous comparative advantage and economies of specialization vs. economies of scale
Authors:Xiaokai Yang
Affiliation:(1) Present address: Department of Economics, Monash University, 3168 Clayton, Vic., Australia
Abstract:This paper draws the distinctions between the concepts of endogenous and exogenous comparative advantages and between the concepts of economies of specialization and scale. A comparison between the equilibrium model endogenizing the degree of specialization and endogenous comparative advantages, neoclassical trade model with exogenous comparative advantages, and an extended Dixit-Stiglitz model with a tradeoff between economies of scale and transaction costs is used to explore the equilibrium implications of the distinctions.
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