Classical comparative advantage theory was extended in two directions: Ricardian theory and [[Heckscher–Ohlin model|Heckscher-Ohlin-Samuelson theory]] (HOS theory). In both theories, the comparative advantage concept is formulated for 2 country, 2 commodity case. It can easily be extended to the 2 country, many commodity case or many country, 2 commodity case.<ref>For example, R. Dornbusch, S. Fischer and P. A. Samuelson, Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods, The American Economic Review, Vol. 67, No. 5, Dec., 1977, pages 823-839. Rudiger Dornbusch, Stanley Fischer and Paul A. Samuelson, Heckscher-Ohlin Trade Theory with a Continuum of Goods, ''Quarterly Journal of Economics'' Volume 95 Issue 2, pages 203-224.</ref> But in the case with many countries (more than 3 countries) or many commodities (more than 3 commodities), the notion of comparative advantage loses its facile features and requires totally different formulation.<ref>Alan V. Deardorff, How Robust is Comparative Advantage, ''Review of International Economics,'' Volume 13, Issue 5, pages 1004–1016, November 2005.</ref> In these general cases, HOS theory totally depends on Arrow-Debreu type general equilibrium theory but gives few information other than general contents. Ricardian theory was formulated by Jones' 1961 paper,<ref>Richard Jones, Comparative Advantage and the Theory Tariffs: A Multi-country, Multi-commodity Model, Review of Economic Studies, Nomber 77, pages 161-175, June 1961.</ref> but it was limited to the case where there are no traded intermediate goods. In view of growing outsourcing and global procuring, it is necessary to extend the theory to the case with traded intermediate goods. This was done by Shiozawa's 2007 paper.<ref>Yoshinori Shiozawa, A New Construction of Ricardian Trade Theory / a Many-Country, Many-Commodity Case with Intermediate Goods and Choice of Production Techniques, Evolutionary and Institutional Economics Review, Volume 3 Issue 2, pages 141-187, March 2007. Andrew J. Cassey, An Application of the Ricardian Trade Model with Trade Costs, Applied Economics Letters, 2012, 19, 1227-1230.</ref> Until now, this is the unique general theory which accounts traded input goods.
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Classical comparative advantage theory was extended in two directions: Ricardian theory and [[Heckscher–Ohlin model|Heckscher-Ohlin-Samuelson theory]] (HOS theory). In both theories, the comparative advantage concept is formulated for 2 country, 2 commodity case. It can easily be extended to the 2 country, many commodity case or many country, 2 commodity case.<ref>For example, R. Dornbusch, S. Fischer and P. A. Samuelson, Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods, The American Economic Review, Vol. 67, No. 5, Dec., 1977, pages 823-839. Rudiger Dornbusch, Stanley Fischer and Paul A. Samuelson, Heckscher-Ohlin Trade Theory with a Continuum of Goods, ''Quarterly Journal of Economics'' Volume 95 Issue 2, pages 203-224.</ref> But in the case with many countries (more than 3 countries) or many commodities (more than 3 commodities), the notion of comparative advantage loses its facile features and requires totally different formulation.<ref>Alan V. Deardorff, How Robust is Comparative Advantage, ''Review of International Economics,'' Volume 13, Issue 5, pages 1004–1016, November 2005.</ref> In these general cases, HOS theory totally depends on Arrow-Debreu type general equilibrium theory but gives little information other than general contents. Ricardian theory was formulated by Jones' 1961 paper,<ref>Richard Jones, Comparative Advantage and the Theory Tariffs: A Multi-country, Multi-commodity Model, Review of Economic Studies, Nomber 77, pages 161-175, June 1961.</ref> but it was limited to the case where there are no traded intermediate goods. In view of growing outsourcing and global procuring, it is necessary to extend the theory to the case with traded intermediate goods. This was done by Shiozawa's 2007 paper.<ref>Yoshinori Shiozawa, A New Construction of Ricardian Trade Theory / a Many-Country, Many-Commodity Case with Intermediate Goods and Choice of Production Techniques, Evolutionary and Institutional Economics Review, Volume 3 Issue 2, pages 141-187, March 2007. Andrew J. Cassey, An Application of the Ricardian Trade Model with Trade Costs, Applied Economics Letters, 2012, 19, 1227-1230.</ref> Until now, this is the unique general theory which accounts traded input goods.
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