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Identifier to cite or link to this item: https://hdl.handle.net/10086/27724

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Title
On the Existence and Characterization of Unequal Exchange in the Free Trade Equilibrium
Creator
Creator Name
Yoshihara, Naoki Yoshihara, Naoki
Affiliation
Affiliation Name
Hitotsubashi University
Affiliation
Affiliation Name
Kochi University of Technology
Affiliation
Affiliation Name
University of Massachusetts
Creator Name
Kaneko, Soh Kaneko, Soh
Affiliation
Affiliation Name
Keio University
Editor
Contributor Name
Institute of Economic Research, Hitotsubashi University
Key Word
Unequal exchange of labor
International division of labor
Subsistence international economies
JEL
D63
D51
Abstract
As in Roemer (1982, chapter 1), this paper considers a simple international trade model and examines the existence and characterization of free trade equilibria involving the unequal exchange of labor (UE). The paper provides an almost complete characterization of the domain of economies in which free trade equilibria with incomplete specialization exist. Moreover, the necessary and sufficient conditions for free trade equilibrium to involve UE is identified. It suggests that the emergence of free trade equilibria with UE cannot be entailed by the competitive mechanism of markets and unequal distribution of wealth alone, but might be understood as an outcome of equilibrium selection on the basis of Nash bargaining between rich and poor nations.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2016-02
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
Discussion paper series. A ; No. 635
NCID
AA11476336
Number of Pages
35
Appears in Collections
Discussion paper series / Institute of Economic Research, Hitotsubashi University
URL
https://hdl.handle.net/10086/27724