The paper presents a general equilibrium model of a pure exchange economy with stochastic endowments, in which speculation in the forward market 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 develop a model of international trade with increasing returns to scale by taking into account the possibility of cooperation among agents in an egalitarian economy. It is shown that each country gains from trade in a trading world in which there are arbitrary numbers of...

It is well known that perfectly competitive free trade is potentially beneficial for all countries if all goods are both rivalrous and excludable in consumption (“private goods”) and recently (2011) the proposition has been modified to accommodate non-rivalrous and non-excludable goods...