Initial stock of public goods determines long-run trade patterns in open economy
The study re-examines how a small open economy trades goods when it has a public intermediate good. It shows that if the amount of labor available is in the middle, there can be multiple long-term trade patterns based on the initial amount of the public good. The research also finds that if the economy is better at making goods that don't rely as much on the public intermediate good, it might not benefit from trade in the long run.