A World Trade Model with Bilateral Trade Based on Comparative Advantage

  title={A World Trade Model with Bilateral Trade Based on Comparative Advantage},
  author={Anders Hammer Str\omman and Faye Duchin March and 2006},
This paper describes an extension of Duchin’s World Trade Model to include the explicit representation of transportation costs, permitting the endogenous determination of bilateral trade flows and region-specific prices. The original model is a linear program that, based on comparative advantage and the minimization of factor use, determines regional production and trade flows as well as world prices and scarcity rents for m regions, n good, and k factors. The new World Trade Model with… CONTINUE READING

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