Increasing Returns and the Theory of International Trade
AbstractIncreasing returns are as fundamental a cause of international trade as comparative advantage, but their role has until recently been neglected because of the problem of modelling market structure. Recently substantial theoretical progress has been made using three different approaches. These are the Marshallian approach, where economies of scale are assumed external to firms; the Chamberlinian approach, where imperfect competition takes the relatively tractable form of monopolistic competition; and the Cournot approach of noncooperative quantity-setting firms. This paper surveys the basic concepts and results of each approach. It shows that some basic insights are not too sensitive to the particular model of market structure. Although much remains to be done, we have made more progress toward a general analysis of increasing returns and trade than anyone would have thought possible even a few years ago.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1752.
Date of creation: Oct 1985
Date of revision:
Publication status: Published as "Urban Concentration: The Role of Increasing Returns and Transport Goods", International Regional Science Review, Vol. 19, no. 1/2 (1996): 5-30.
Note: ITI IFM
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Helpman, Elhanan & Razin, Assaf, 1983. "Increasing returns, monopolistic competition, and factor movements : A welfare analysis," Journal of International Economics, Elsevier, Elsevier, vol. 14(3-4), pages 263-276, May.
- Feenstra, Robert C & Judd, Kenneth L, 1982. "Tariffs, Technology Transfer, and Welfare," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 90(6), pages 1142-65, December.
- Dixit, Avinash K & Stiglitz, Joseph E, 1975.
"Monopolistic Competition and Optimum Product Diversity,"
The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
- Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, American Economic Association, vol. 67(3), pages 297-308, June.
- Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, Elsevier, vol. 9(4), pages 469-479, November.
- James R. Melvin, 1969. "Increasing Returns to Scale as a Determinant of Trade," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 2(3), pages 389-402, August.
- Ethier, Wilfred, 1979. "Internationally decreasing costs and world trade," Journal of International Economics, Elsevier, Elsevier, vol. 9(1), pages 1-24, February.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, American Economic Association, vol. 70(5), pages 950-59, December.
- Ethier, Wilfred J, 1982. "Decreasing Costs in International Trade and Frank Graham's Argument for Protection," Econometrica, Econometric Society, Econometric Society, vol. 50(5), pages 1243-68, September.
- Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 43(2), pages 217-35, June.
- Louis Makowski & Joseph M. Ostroy, 1991.
"The Margin of Appropriation and an Extension of the First Theorem of Welfare Economists,"
UCLA Economics Working Papers, UCLA Department of Economics
629, UCLA Department of Economics.
- Makowski, L. & Ostroy, J.M., 1991. "The Margin of Appropriation and an Extension of the First Theorem of Welfare Economics," Papers, California Davis - Institute of Governmental Affairs 388, California Davis - Institute of Governmental Affairs.
- Singh, Anshul, 2013. "Do the FDI, Economic growth and Trade affect each other for India: An ARDL Approach," MPRA Paper 51447, University Library of Munich, Germany.
- J. David Richardson, 1990. "Empirical Research on Trade Liberalization With Imperfect Competition: A Survey," NBER Working Papers 2883, National Bureau of Economic Research, Inc.
- G. Ietto-Gillies, 1998. "Earnings From Foreign Direct Investment: Possible Effects on Domestic Economies and Patterns in EU Countries," CIBS Research Papers in International Business 9-98, London South Bank University CIBS.
- Carlos Pombo, 2001. "Intra-industry Trade and Innovation: An empirical study of the Colombian manufacturing industry," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 15(1), pages 77-106.
- Klundert, T.C.M.J. van de, 1988. "A macroeconomic two-country model with price-discriminating monopolists," Open Access publications from Tilburg University urn:nbn:nl:ui:12-4875523, Tilburg University.
- Bitzenis, Aristidis & Tsitouras, Antonis & Vlachos, Vasileios A., 2009. "Decisive FDI obstacles as an explanatory reason for limited FDI inflows in an EMU member state: The case of Greece," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 38(4), pages 691-704, August.
- G. Ietto-Gillies, 1998. "Location of Affiliates and Degree of Internationalisation: An Analysis of the World's Largest 664 TNCs," CIBS Research Papers in International Business 14-98, London South Bank University CIBS.
- Konchyn, Vadym, 2006. "The Evolution of Ukrainian Economy: New Trade Theory Evidence," MPRA Paper 588, University Library of Munich, Germany, revised 07 Sep 2006.
- J. Mohan Rao, 1998. "Development in the Time of Globalization," Working Papers, Political Economy Research Institute, University of Massachusetts at Amherst wp1, Political Economy Research Institute, University of Massachusetts at Amherst.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.