The Law of Comparative Advantage Without Social Utility Functions

REVIEW OF INTERNATIONAL ECONOMICS

Posted: 7 Mar 1997

See all articles by Koji Shimomura

Koji Shimomura

Kobe University - Research Institute for Economic and Business Administration

Kar-yiu Wong

University of Washington - Department of Economics

Abstract

This paper derives sufficient conditions under which the Law of Comparative Advantage and the General Law of Comparative Advantage are true when the preferences of the trading countries may not be represented by "well-behaved" social utility functions. It shows that in the neoclassical framework with convex technologies, profit maximization and Walras's Law, the laws of comparative advantage under anatural trade are still valid if either the General Law of Demand or the Weak Axiom of Revealed Preference holds, or if losers are compensated using lump-sum transfers or consumption taxes.

JEL Classification: F1

Suggested Citation

Shimomura, Koji and Wong, Kar-yiu, The Law of Comparative Advantage Without Social Utility Functions. REVIEW OF INTERNATIONAL ECONOMICS, Available at SSRN: https://ssrn.com/abstract=4715

Koji Shimomura

Kobe University - Research Institute for Economic and Business Administration ( email )

2-1, Rokkodai-cho, Nada-ku
Kobe, 657-8501
Japan
+81 78 881 1212 (Phone)
+81 78 861 6434 (Fax)

Kar-yiu Wong (Contact Author)

University of Washington - Department of Economics ( email )

Box 353330
Seattle, WA 98195-3330
United States
206-685-1859 (Phone)
206-685-7477 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
707
PlumX Metrics