The paper presents a general equilibrium model of a pure exchange economy with stochastic endowment in which speculation is profitable and stabilizes prices, but is useless from a welfare point of view. Reconciling the Siegel paradox with the theory of incomplete markets we show that banning...

A collection of essays on contemporary international trade, this text critiques the major theoretical components; including the Ricardian principle of comparative advantage and the developed normative analysis of international transfers

Conditions sufficient for factor price equalization within any non-trivial subset of trading countries are provided. The conditions are that (a) the factor endowment ratios of countries in the subset are all bounded by the factors-in-use ratios in an equilibrium of the hypothetical world economy...

When can a country be said to benefit from free trade?This question has obsessed economists for more than 200 years, and a definitive answer has never been provided. Continuing the influential work begun in The Gains from Trade and the Gains from Aid, (Routledge 1995), Murray Kemp here presents...

This paper presents a dynamic general equilibrium model of multi-country, two-good and two-factor, in which both long-run growth and international trade patterns are examined. In each country, government expenditure on a public intermediate good plays a crucial role in the realization of...