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Please note that Internet Explorer version 8. Click the View full text link to bypass dynamically loaded article content. This chapter explores the classical to modern literature for the development of gains from trade theory. Even though classical, neoclassical, and every school of postclassical economists have long emphasized that nations can gain from an expanding volume of world trade, in the last years of the 1970s, many sectors of national economies were once again becoming more protectionist.
This chapter explores the arguments supporting the free-trade doctrine in the context of major theoretical developments in the gains from trade literature. The classical writings on the issue are voluminous. They have been excellently appraised, however, making it possible to present the essential foundations with comprehensive brevity. This article has not been cited. This paper presents a two-country model of monopolistic competition in which differentiated products are produced subject to external economies of scale and two countries differ only in size measured by the factor endowment.
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It is shown that under free trade, the larger country has positive net exports of differentiated products, which leads to its gains from trade, while the smaller country may lose from trade. Noteworthy is that the industrial agglomeration induced by inter-industry trade is possibly harmful to both countries if the two countries are similar in size and the taste for product diversity is sufficiently strong. Check if you have access through your login credentials or your institution. A mathematical approach to the common types of wave motion C. Advanced Frequency Synthesis by Phase Lock william f. Advances in molecular vibrations and collision dynamics joel m.
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