TY  - JOUR
AU  - Rauch,James E.
TI  - Comparative Advantage, Geographic Advantage, and the Volume of Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3512
PY  - 1990
Y2  - November 1990
UR  - http://www.nber.org/papers/w3512
L1  - http://www.nber.org/papers/w3512.pdf
N1  - Author contact info:
James E. Rauch
Department of Economics
University of California, San Diego
La Jolla, CA 92093-0508
Tel: 858/534-2405
Fax: 858/534-7040
E-Mail: jrauch@weber.ucsd.edu
AB  - A functional relationship between the degree of a country?s comparative advantage in any good and the volume of its net exports of that good to its trading partner is established using a model with per-unit-distance transportation costs between countries' coasts and their interiors. The greater a country's comparative advantage, the greater the transportation cost it can overcome and hence the deeper its exports can penetrate geographically into its trading partner. The internal spatial structure of a country is modeled using cities as the basic spatial units. It is shown that the city closest to the coast will be the largest and have the highest wage rate and residential rental rates, and that population sizes, wage rates, and residential rental rates of cities all fall as one moves inland.
ER  -