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Infrastructure Development, Comparative Advantage and Missing Trade

  • Rajat Acharyya
Chapter

Abstract

Whether infrastructure development facilitates trade by establishing comparative advantage in a wider set of goods is examined in an extended continuum of goods Ricardian model as developed by Dornbusch, Fisher and Samuelson (1977). When infrastructure development is financed through income tax collection, more goods are traded and the export basket of at least one country becomes more diversified. But if it is financed by tariff proceeds, increased volume of trade and diversified export baskets are not certain outcomes.

Keywords

Home Country Transport Cost Infrastructure Development Relative Wage Wage Bill 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer India 2014

Authors and Affiliations

  1. 1.Department of EconomicsJadavpur UniversityKolkataIndia

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