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International Trade Theory and Policy: A Review of the Literature

Author

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  • Sunanda Sen

Abstract

This paper provides a survey of the literature on trade theory, from the classical example of comparative advantage to the New Trade theories currently used by many advanced countries to direct industrial policy and trade. An account is provided of the neo-classical brand of reciprocal demand and resource endowment theories, along with their usual empirical verifications and logical critiques. A useful supplement is provided in terms of Staffan Linder’s theory of "overlapping demand," which provides an explanation of trade structure in terms of aggregate demand. Attention is drawn to new developments in trade theory, with strategic trade providing inputs to industrial policy. Issues relating to trade, growth, and development are dealt with separately, supplemented by an account of the neo-Marxist versions of trade and underdevelopment.

Suggested Citation

  • Sunanda Sen, 2010. "International Trade Theory and Policy: A Review of the Literature," Economics Working Paper Archive wp_635, Levy Economics Institute.
    • Handle: RePEc:lev:wrkpap:wp_635
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    Citations

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    Cited by:

    1. Jacob Wood & Gohar Feroz Khan, 2015. "International trade negotiation analysis: network and semantic knowledge infrastructure," Scientometrics, Springer;Akadémiai Kiadó, vol. 105(1), pages 537-556, October.
    2. Gent Jusufi & Lura Rexhepi Mahmutaj & Gentina Jusufi & Nora Jusufi, 2015. "Kosovo’s International Trade: Balance of Trade," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 1, September.
    3. Carmen Elena Dorobat, 2015. "A brief history of international trade thought: From pre-doctrinal contributions to the 21st century heterodox international economics," The Journal of Philosophical Economics, Bucharest Academy of Economic Studies, The Journal of Philosophical Economics, vol. 8(2), May.
    4. Reginald Masimba Mbona, 2021. "The Impact of China-Africa Trade on Industries in Africa: A Case Study of FOCAC and BRI," Business and Economic Research, Macrothink Institute, vol. 11(2), pages 301-318, June.
    5. Mohd. Fayaz & Sandeep Kaur Bhatia, 2018. "Technological Intensity of Indian Exports and the Performance of Emerging Asian Economies," Emerging Economy Studies, International Management Institute, vol. 4(1), pages 62-77, May.
    6. E. Amah & F. B. Tende, 2020. "Globalization And Nigeria: Consequences And Opportunities For National Development," Noble International Journal of Social Sciences Research, Noble Academic Publsiher, vol. 5(12), pages 171-181, December.
    7. Elynn Y. Chen & Rong Chen, 2019. "Modeling Dynamic Transport Network with Matrix Factor Models: with an Application to International Trade Flow," Papers 1901.00769, arXiv.org.
    8. Degele Ergano & Seshagiri Rao, 2019. "Sino–Africa Bilateral Economic Relation: Nature and Perspectives," Insight on Africa, , vol. 11(1), pages 1-17, January.
    9. Md. Anwarul Azim, 2021. "Development Outcomes from Openness to International Trade on Bangladesh’s Ready Made Garments Sector: Comparative Advantage, Need for Dynamic Gains and Role of the Government," International Journal of Science and Business, IJSAB International, vol. 5(5), pages 66-74.
    10. Ghosh, Dilip K. & Arize, Augustine C. & Zaher, Angie, 2017. "Asymmetric model of neoclassical trade and optimum tax-subsidy-tariff policy," The Journal of Economic Asymmetries, Elsevier, vol. 16(C), pages 87-100.
    11. Dr. Caroline Ntara, 2022. "What Does Africa Stand to Gain from the African Continental Free Trade Area?," International Journal of Science and Business, IJSAB International, vol. 16(1), pages 69-90.

    More about this item

    Keywords

    Comparative Costs; Resource Endowment Pattern and Trade; Overlapping Demand; Strategic Trade; New Theories of Trade; Trade and Development;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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