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Transport Costs and North-South Trade
Journal article   Peer reviewed

Transport Costs and North-South Trade

Didier Laussel and Raymond Riezman
Asia-Pacific journal of accounting & economics, Vol.13(2), pp.111-122
12/01/2006
DOI: 10.1080/16081625.2006.9720775

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Abstract

We develop a simple two country model of international trade that assumes that there is a fixed cost associated with transporting goods across national boundaries. We show that this leads to multiple equilibria that can be Pareto-ranked. One of these equilibria is autarky. We argue that the existence of fixed costs in transport can help explain the low volume of North-South trade.
North-South Trade Transport Cost

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