Study on the Universal Formula of International Trade Based on the Comparative Advantage and the Economies of Scale
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Abstract
In order to discuss the real cause of the international trade,this paper has defined two new concepts that are the comparative advantage power and the scale economic power.Making use of the comparative method and the graphical method,this paper has unified the comparative advantage and the scale economy,and found out the international trade "universal formula" through relaxing some assumptions to study the process of international trade caused by the scale economy including "two versions". Conclusion is drawn that the comparative advantage and the scale economy have caused international trade in common.Under the condition of introducing "compensation trade condition line",the cause of the international trade is decomposed into the comparative advantage power effect and the scale economic power effect.Meanwhile,Leontief paradox may also be used to explain the international trade "universal formula".
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