Breaks in the chain of comparative advantage

The chain proposition of comparative advantage states that when factor prices differ between two countries producing many products with two factors, every export of the capital abundant country would be more capital intensive than any of its imports. The present note points out that an economy has the option to break the chain to reach full employment if its factor endowment is not spanned by the production cone of the more intensive products.

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Year of publication:	2010
Authors:	Choi, E. Kwan ; Thompson, Henry
Published in:	International Review of Economics & Finance. - Elsevier, ISSN 1059-0560. - Vol. 19.2010, 2, p. 346-348
Publisher:	Elsevier
Subject:	Chain Comparative advantage

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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