摘要：We present a dynamic comparative advantage model in which moderate reductions in
trade costs can generate sizable increases in trade volumes over time. A fall in
trade costs has two effects on the volume of trade. First, for given factor
endowments, it raises the degree of specialization of countries, leading to a
larger volume of trade in the short run. Second, it raises the factor price of
each country’s abundant production factor, leading to diverging paths of
relative factor endowments across countries and a rising degree of
specialization. A simulation exercise shows that a fall in trade costs over time
produces a non-linear increase in the trade share of output as in the data. Even
when elasticities of substitution are not particularly high, moderate reductions
in trade costs lead to large trade volumes over time. We present further
empirical evidence in favour of our approach, documenting the link between trade
liberalization and the cross-country divergence of investment shares.
