Abstract:
Division of labor models have become a standard analytical tool, along withcompetitive general equilibrium models (Ricardian, HOS, Ricardo-Viner), in public finance, trade, growth, development, and macroeconomics. Yet unlike the earlier models, specialization models lack a canonical representation. This is because they are both new and complex, characterized by multiple equilibria, instability, and emergent structural properties under parameter transformation. We develop a general framework for such models, illustrating results from current research on specialization models, and explaining why one sub-class of these models is particularly difficult to illustrate easily.
