Search Friction and Costly Entry in the Specific Factors Model

Abstract

In this article, I echo Jones (1965) and sketch a model rooted in search frictions and costly entry to demonstrate by example how central features of simple general equilibrium models can show up as ‘retranslated properties in diverse areas’. By uncovering and imparting popular understanding about these central features of simple general equilibrium models, the legacy of Professor Jones’s contributions transcends diverse disciplines in economics, extending well beyond the theory of international trade.JEL Codes: D5, F1, J6