ABSTRACT
Hicks (1953) suggested that any uniform expansion of a country's production set would normally benefit its trading partners via an enhancement of the partners' terms of trade. More precise statements, and formal proofs, were provided by Kemp (1955), for economies suffering from Keynesian unemployment, and by Ikema (1969), for economies with homothetic preferences, full employment of resources and incomplete specialization of production. More recently, Kemp and Shimomura (1988) have observed that, as an important implication of the Hicks-Ikema (H-I) theorem, neither country can hold a continuing global absolute advantage over the other. Any temporary advantage would be dissipated by self-serving gifts of technical information by the owners of firms in the more advanced country.
