I think another point to keep in mind when thinking of comparative advantage is that it is clearly a necessary condition for trade (or at least seems obvious to me that it is) but not clearly a sufficient condition.
Even in this two good model it seems that one must accept there is an implied third good, everything else (leisure, sleep, something else?) so the analysis of the two goods is a partial equilibrium analysis. If the margins are getting changed there then the general equilibrium has now been disturbed. That will then feed back into the two good relationships.
I think one of the questions then is just what margins or constrains are being relaxed when looking to trade based on the comparative advantage.
For instance, lets assume that the two islands specialize in either coconuts or bananas and then trade at the 1:1 exchange. Production and consumption has not changed. Since they clearly had more minutes in the day to increase output on their own consuming 10 bananas and coconuts a week was optimal. If that level of consumption is not changed due to trade (generally assumed to be the case but lets ask) what happens with the time no longer needed for production?
If the additional available time is now just boredom I would think trade becomes a bit of an annoyance and trade is curtailed. If that is true on one side but on the other they other things they can do with the time a different form of friction emerges, perhaps one side claiming the other is dumping or protectionist.
I think another point to keep in mind when thinking of comparative advantage is that it is clearly a necessary condition for trade (or at least seems obvious to me that it is) but not clearly a sufficient condition.
Even in this two good model it seems that one must accept there is an implied third good, everything else (leisure, sleep, something else?) so the analysis of the two goods is a partial equilibrium analysis. If the margins are getting changed there then the general equilibrium has now been disturbed. That will then feed back into the two good relationships.
I think one of the questions then is just what margins or constrains are being relaxed when looking to trade based on the comparative advantage.
For instance, lets assume that the two islands specialize in either coconuts or bananas and then trade at the 1:1 exchange. Production and consumption has not changed. Since they clearly had more minutes in the day to increase output on their own consuming 10 bananas and coconuts a week was optimal. If that level of consumption is not changed due to trade (generally assumed to be the case but lets ask) what happens with the time no longer needed for production?
If the additional available time is now just boredom I would think trade becomes a bit of an annoyance and trade is curtailed. If that is true on one side but on the other they other things they can do with the time a different form of friction emerges, perhaps one side claiming the other is dumping or protectionist.