Predicting the Pattern of International Trade in the Neoclassical Model: A Synthesis
Abstract
I propose a framework that takes a set of conceivable outcomes as the primitive and a prediction is defined by identifying a subset on the set of conceivable outcomes. This notion of predictability serves as an organizing principle for characterizing pattern of trade predictions in single economy and integrated equilibrium formulations of the neoclassical trade model. I identify allocative efficiency as the unifying subset selection criterion for the different formulations of the neoclassical trade model, ranging from Ricardo’s (1817) original comparative advantage formulation to the multi-cone Heckscher-Ohlin specification with multiple countries, goods and factors.
Fields of Study & Subjects
Monetary Policy and Economic Impact
Economic Theory and Policy
Economic Theory and Institutions
Publication details
- Journal / source
- World Scientific Studies in International Economics
- Pages
- 255–277
- Publication date
- 25 June 2026
- Language
- EN
- Document type
- Book chapter