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Part of the "Frontiers in Economics & Globalization" series, this book deals with a range of trade and development issues in terms of the general equilibrium structure. It shows how neo-classical models of trade theory can be used to highlight many challe

The concept of factor intensity has played a key role in the development of international trade theory. The factor proportions utilized in the production of commodities differ from activity to activity. Some commodities employ a higher ratio of capital to labor than do others, and the basic Heckscher-Ohlin Theorem explaining the pattern of international trade links a nations's factor endowment proportions of capital to labor to the capital/labor factor intensities of its export activities. This theorem has been exhaustively analyzed to reveal that exceptions may occur when technologies exhibit factor-intensity reversals, when demand conditions are highly asymmetric between countries, or when the number of factors and commodities exceeds the frequently-assumed value two. Our remarks in this paper proceed along different lines. We argue that in explaining the link between factor intensities associated with a nation's exports, imports or non-traded activities and that nation's factor endowment base, at least three rather separate roles for factor intensities can be identified. Once this is done, paradoxical statements such as, "Exports from laborabundant countries are capital intensive", can be shown to have some validity. Furthermore, in explaining this position recourse is had to various characteristics of technology and trade which have been in the forefront of recent developments in trade theory, e.g., quality differences in an intra-industry setting, increasing returns to scale activities, uncertainty in production, and the role of services in trade.

Issues related to environmental protection and trade liberalization have moved to the forefront of international policy agendas. This text discusses our knowledge of these issues in the presence of international trade and trade policy in the presence of environmental externalities

Issues related to environmental protection and trade liberalization have moved to the forefront of international policy agendas. This text discusses our knowledge of these issues in the presence of international trade and trade policy in the presence of environmental externalities.

AbstractWe show that the implications of a merger on collusion sustainability change significantly from the extant literature if merger is not profitable in the punishment subgame where firms play non-cooperative Cournot–Nash game. Merger either does not affect collusion sustainability or it may decrease or increase collusion sustainability, depending on the output allocation for the merged firm. Our paper has the following implication for antitrust policies. If merger is observed, the authority will expect an industry-wide collusion, since merger will occur in our analysis provided it increases collusion sustainability.

AbstractIn this paper, we study the commuting behavior of citizens living in or near a city who must decide how to get to work. Such citizens can use their own car and drive to work or they can take public transport. The two public transport options we consider are the bus and train. In this context, we perform two tasks. First, we analyze the choice of car versus train. We calculate the deadweight loss from the negative externality (traffic congestion) generated by car travel and then discuss how a toll can achieve the efficient allocation of commuters between the car and train modes of transport. Second, we analyze the choice of car versus bus. Again, we calculate the deadweight loss from the traffic congestion resulting from car travel and discuss how a toll can achieve the efficient allocation of commuters between the car and bus modes of transport, which would benefit all commuters.