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Price adjustments and multiregional rigidities in the analysis of world trade

  • Modelling Flows and Interactions
  • Published:
Papers of the Regional Science Association

Abstract

This paper reviews a variety of approaches to modeling interregional and international trade flows. It then suggests a framework which is capable of combining price formation mechanisms with factors which cause resistance to change and barriers to trade. In certain respects the framework adheres to the Takayama-Judge tradition, but differs by using a probabilistic approach which generates solutions which are not perfectly competitive equilibria. With regard to prices, the adopted framework is Walrasian rather than Marshallian in nature.

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Authors and Affiliations

  1. Division of Building Research, Commonwealth Scientific and Industrial Research Organization, 3190, Highett, Victoria, Australia

    David Batten

  2. Regional and Urban Development, International Institute for Applied Systems Analysis, Laxenburg, Austria

    Börje Johansson

Authors
  1. David Batten
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  2. Börje Johansson
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Batten, D., Johansson, B. Price adjustments and multiregional rigidities in the analysis of world trade. Papers of the Regional Science Association 56, 145–166 (1985). https://doi.org/10.1007/BF01887909

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