Journal Press India^®

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North-South trade failure with skewed income distribution has been a topic of debate for many decades despite the promises supported by many theories. The present paper gives different criticisms in three different versions: the first version criticises the faulty fixation of price of the goods based on marginal cost of production (inputs) in the manufactured country and not on the marginal cost of production (same inputs) in the importing country and exchange rate differences; the second version gives criticism on behavioural differences of firms in the North and the South; the third version criticises the differences in the technologies of production (whether licensed or not). Owing to the above criticisms, market access of the goods (from both the South and North) has differences and hence income distribution in equity cannot be achieved.

Keywords

Increasing Returns to Scale, Intra Industry Trade, Home market effect, Reciprocal dumping, The Flying Geese Approach

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