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Title: |
Comparative Advantage and Hysteresis in Trade
Balance |
| Author: |
Wang, Yunjong |
| Author
Affiliation: |
Korea Institute for International Econ
Policy |
| Source: |
International Economic Journal, Winter 1995, v. 9, no. 4, pp. 57-76 |
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Publication Date: |
Winter 1995 |
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Abstract: |
The paper constructs the Ricardian trade
model with a continuum of goods to analyze the entry and exit behavior
of firms in response to real exchange rate fluctuations. Our general
equilibrium model of international duopoly provides a systematic
formulation in underscoring both the role of irreversible market-entry
sunk costs and real exchange rate movement in determining the
competitive margin and the contribution of hysteresis to the persistence
of trade deficit. |
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