On the evolution of comparative advantage in matching models

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Detail(s)

Original languageEnglish
Pages (from-to)169-193
Journal / PublicationJournal of International Economics
Volume64
Issue number1
Publication statusPublished - Oct 2004

Abstract

This paper examines whether comparative advantage is the long-run outcome of an evolutionary process in the open economy. It formalizes the notion that natural selection eliminates inefficient firms and thus leads to stable and perhaps efficient patterns of world trade. Instead of assuming the existence of a Walrasian auctioneer, we study two simple matching processes that coordinate trade between firms. Our central result is that specialization according to comparative advantage, with the larger country possibly incompletely specialized, is the unique evolutionarily stable state of the world economy. © 2003 Elsevier B.V. All rights reserved.

Research Area(s)

  • Comparative advantage, Evolutionarily stable equilibrium, Matching

Citation Format(s)

On the evolution of comparative advantage in matching models. / Fisher, Eric O.N.; Kakkar, Vikas.
In: Journal of International Economics, Vol. 64, No. 1, 10.2004, p. 169-193.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review