Using a two-sector one-factor comparative-advantage-based trade model under uncertainty, we show that (1) to specialize according to comparative advantages may be sub-optimal in a multi-period setting; (2) there are conditions under which, even if agents are risk-neutral, the decentralized solution is inefficient and characterized by overspecialization.
Uncertatinty and the Optimal Level of Specialization / Di Maio, M; Valente, M.. - In: RESEARCH IN ECONOMICS. - ISSN 1090-9451. - 66:3(2012), pp. 213-218. [10.1016/j.rie.2012.04.001]
Uncertatinty and the Optimal Level of Specialization
Di Maio M;
2012
Abstract
Using a two-sector one-factor comparative-advantage-based trade model under uncertainty, we show that (1) to specialize according to comparative advantages may be sub-optimal in a multi-period setting; (2) there are conditions under which, even if agents are risk-neutral, the decentralized solution is inefficient and characterized by overspecialization.File allegati a questo prodotto
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