Abstract
This paper shows relative price competition based on comparative advantage leads to diversified production and complex trade patterns with complete specialization unlikely for many countries and goods. Focused on models with three and four countries and goods, the present analysis starts with the extreme countries in each relative price ranking trading those two goods. The terms of trade determine the directions of trade for middle countries in each ranking. The potential trade patterns prove realistic with multiple exports, nontraded goods, nontrading countries, separate trade groups, and two-way trade with exports and imports of the same good.
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22 March 2024
A Correction to this paper has been published: https://doi.org/10.1007/s10368-024-00610-2
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Acknowledgements
This paper is dedicated to the late Roy Ruffin who provided motivation and critical feedback as the results developed. Nazif Durmaz provided substantial input. Elena Antoniadou made useful comments. John Gilbert and Tom Osang made insightful suggestions at the 2022 Southern Economics Association meeting. Jim Cassing, Farhad Rassekh, Alexi Thompson, Brandon Vick, and Martin Zagler provided stimulating discussion at the 2023 Economics Workshop in Ios, Greece. A referee of this journal also made constructive suggestions that improved the paper.
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The original online version of this article was revised: The article "Multilateral comparative advantage: complex trade with many countries and goods", written by "Henry Thompson", was originally published online on the publisher’s internet portal on "30 January 2024" with Open Access under “Creative Commons Attribution (CC BY) license 4.0”. With the author’s/authors' decision to cancel Open Access the copyright of the article changed on "05 March 2024" to "The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2024” with all rights reserved.
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Thompson, H. Multilateral comparative advantage: complex trade with many countries and goods. Int Econ Econ Policy 21, 285–296 (2024). https://doi.org/10.1007/s10368-024-00586-z
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DOI: https://doi.org/10.1007/s10368-024-00586-z