《Scale economies》.pdf

American Economic Association Scale Economies, Product Differentiation, and the Pattern of Trade Author(s): Paul Krugman Reviewed work(s): Source: The American Economic Review, Vol. 70, No. 5 (Dec., 1980), pp. 950-959 Published by: American Economic Association Stable URL: /stable/1805774 . Accessed: 11/01/2013 09:04 Your use of the JSTOR archive indicates your acceptance of the Terms Conditions of Use, available at . /page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@. . American Economic Association is collaborating with JSTOR to digitize, preserve and extend access to The American Economic Review. This content downloaded on Fri, 11 Jan 2013 09:04:30 AM All use subject to JSTOR Terms and Conditions Scale Economies, Product Differentiation, and the Pattern of Trade By PAUL KRUGMAN* For some time now there has been con- from trade even if the economies have iden- siderable skepticism about the ability of tical tastes, technology, and factor endow- comparative cost theory to explain the ac- ments. This basic model of trade is pre- tual pattern of international trade. Neither sented in Section I. It is closely related to a the extensive trade among the industrial model I have developed elsewhere; in this countries, nor the prevalence in this trade of paper a somewhat more restrictive formula