Imported Capital Goods Redefine International Trade Patterns, Study Finds
The article explores how changes in income distribution affect the costs of goods and international trade patterns. Capital goods play a crucial role in determining which goods countries specialize in. Autarky costs don't always predict trade patterns accurately when capital goods are involved. Having multiple links in the comparative advantages chain can be necessary for certain industries, especially when profit rates change. The type of capital goods used can also impact how the chain is structured.