Template-Type: ReDIF-Paper 1.0
Author-Name: Kwok Tong Soo
Author-Name-First: Kwok Tong
Author-Name-Last: Soo
Title: Indivisibilities in the Ricardian model of trade
Abstract: This paper develops a Ricardian model of trade in which there are indivisibilities in both production and consumption. Indivisibilities give rise to new results compared to the standard model with perfectly divisible production and consumption. Production indivisibility may result in complete specialisation even in autarky, while consumption indivisibility may result in consumption heterogeneity even amongst ex ante identical consumers. Indivisibilities lead to efficiency losses relative to the perfectly divisible case.
Creation-Date: 2016
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/LancasterWP2016_012.pdf
File-Format: application/pdf
Number: 127876284
Classification-JEL: F11
Keywords: Ricardian model, CES preferences, indivisible production, indivisible consumption
Handle: RePEc:lan:wpaper:127876284