论文导读 | The basic Theory of International Trade(Ⅰ)

Today we are sharing a paper as planned, The General Validity of the Law of Comparative Advantage, authored by Alan V.Deardorff in1980.

This paper demonstrates the Law of Comparative Advantage in a general model, which implies a big step forward of neoclassic international theory.

The very first step of underlying a paper is always to understand its abstract.

“It is well known that the law of comparative advantage breaks down when applied to individual commodities or pairs of commodities in a many-commodity world. This paper shows that the law is nonetheless valid if restated in terms of averages across all commodities. Specifically, a theorem and several corollaries are derived which establish correlations between vectors of trade and vectors containing relative-autarky-price measures of comparative advantage. These results are proven in a general many-commodity model that allows for tariffs, transport cost, and other impediments to trade.”

After reading the abstract, we’ll have a brief outline of this paper. The author demonstrated our law in a many-commodity model from an average(general) perspective. Secondly, the method to figure out the validity is through finding the relationship between trade vector and autarky-price vector. Besides, this paper gives a more realistic interpret to the law of comparative advantage by including more impediments to trade.

Now let’s get the author’s ideas into shape. Based on neoclassical economic model’s assumption, he proposes a simple theorem,, followed by four corollaries. For the discussion part, stronger inequalities and economic relationships are mentioned. At last, he restated his thinking and the general advantage of this model after having a macro-review of previous models.

Generally, this paper provides a useful method to observe existence of comparative advantage, and more importantly, gives a logistic idea to make a big step from a easy model to a realistic model. Speaking of its contribution, this article had truly boosted the empirical research on comparative advantage and given them strong theoretical support.

For learners of international economics, I dare say it’s worth reading, at least, two times.

We are sharing his further discussion in the paper, hoping to arouse your interests.

—责编：陈雨珩 —

—推送：张宇晗 —