international trade theory
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by
Steven
N.
Durlauf
and
Lawrence
E.
Blume
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Abstract
International trade theory provides explanations for the pattern of international trade and the distribution of the gains from trade. The theory convinces most economists of the benefits of liberal trade. But many non-economists oppose liberal trade. Opponents include some who may have encountered trade theory but nevertheless fall prey to fallacious reasoning. This article attempts to convey why trade theory is so persuasive to economists and also to deal with why many non-economists are not persuaded.
Keywords
absolute advantage; adjustment costs; autarky; bilateral trade; comparative advantage; comparative labour productivity advantage; competitive advantage; consumption taxation; economic theory of gravity; economies of scale; endogenous advantage; external budget constraint; factor immobility; factor proportions theory; free trade; gains from trade; general equilibrium trade model; Heckscher–Ohlin trade theory; imperfect competition; information limitations; international trade theory; lump-sum transfers; monopolistic competition; multilateral resistance; multiple equilibria; partial equilibrium; product variety; productivity shocks; protection; Ricardian trade theory; substitution effect
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How to cite this article
Anderson, James E. "international trade theory." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 19 June 2013 <http://www.dictionaryofeconomics.com/article?id=pde2008_I000263> doi:10.1057/9780230226203.0839

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