PROCOMPETITIVE GAINS FROM TRADE AND COMPARATIVE ADVANTAGE

Having made the concepts of pro or anticompetitive output changes prec ise, necessary and sufficient conditions for trade gains are derived u nder conditions of increasing returns to scale and imperfect competiti on in a general equilibrium model with any (finite) number of goods an d factors. These conditions yield generalizations of the theorems of c omparative advantage in goods and implicit factor trade (the factor co ntent version of the H-O theorem). Other generalizations can be obtain ed if one assumes quasihomothetic preferences and that welfare effects are dominated by price rather than income effects.