Why are there rich and poor countries? Symmetry breaking in the world economy: A note

This paper extends K. Matsuyama (1996, Journal of the Japanese and Internat ional Economies, 10, 419-439) to allow for the presence of a fixed factor s uch as land. By assuming that agricultural production is more land-intensiv e than manufacturing production, we generalized Matsuyama's results on symm etry breaking in the world economy. That is, international trade by causing an agglomeration of economic activities in different countries of the worl d makes inevitable the coexistence of rich and poor. (C) 1999 Academic Pres s.