As in Helpman and Krugman (1985), it proves convenient to solve for the "integrated world equilibrium", i.e. the equilibria that would obtain in the absence of any international borders. Under conditions that give rise to factor price equalization, a world trading eqillibrium reproduces the integrated equilibrium in its essential details. g0 properties of the latter equilibria can be applied to the analysis of the former. For this reason the following discussion deals first with the integrated economy.