The Small Country in a Large World
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Usually studies of international trade begin with the case of a small trading country, which is unable to affect world prices, and then proceed to the case of a trading world. In this study we have reversed the process. The reason is one of organization; the results of the analysis of the small trading country (Section 1) are very applicable to the case in which two countries have different rates of population growth (Section 2). It is easy to see that the end result of such growth is that one country vanishes in comparison to the other, and this small country trades at prices determined by the interaction of demand and supply in the large country.
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