Increasing returns, public inputs, and international trade
通过一个政府资助公共投入的模型，说明仅要素禀赋绝对量的差异就能引发贸易，且这种贸易可能呈现里昂惕夫悖论。
Governments often finance the development of new technologies. Such new technologies are public inputs whose simultaneous use by several industries imparts a kind of increasing returns to scale to the economy. By means of an example incorporating such a government-financed public input, this note demonstrates that (i) differences in the absolute amounts of factor endowments alone can cause trade, and (ii) such a trade can exhibit Leontief's paradox. Consider an economy which uses its endowments of labor L and capital K to produce two tradable private goods X, and X2 and a public input XO. The public input is not traded internationally but is purchased by the government and made available to the private-good industries. Their production functions are given by'