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On the Smithian Origins of "New" Trade and Growth Theories

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  • Aykut Kibritcioglu

    (Ankara University & University of Illinois at Urbana-Champaign)

Abstract

Adam Smith (1776) is generally ignored as an international trade theorist in textbooks and surveys because of the common belief that he only confirmed the rule of absolute advantages to explain structure of foreign trade. On the other hand, many textbooks and surveys on growth theories simply overlook Smith’s significant contributions to economic growth theory. However, his vent-for-surplus approach may be interpreted as a pioneering study which stresses the importance of economies-of- scale in explaining the structure of foreign trade. Furthermore, in Smith (1776), both learning by doing and economies-of-scale are crucial to explain long-run economic growth. This short paper addresses to the undeniable influence of Smith's concepts such as "extent of the market", "division of labor", "improved dexterity in every particular workman" and "simple inventions coming from workman" on both recent trade and growth models. The note mainly is based on a schematic outline of Smith's ideas on the nature and causes of the wealth of nations.

Suggested Citation

  • Aykut Kibritcioglu, 1997. "On the Smithian Origins of "New" Trade and Growth Theories," International Trade 9711001, University Library of Munich, Germany, revised 04 Feb 2002.
  • Handle: RePEc:wpa:wuwpit:9711001
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    More about this item

    Keywords

    History of economic thought; Adam Smith; international trade theory; vent-for-surplus; economies-of-scale; learning by doing; externalities; endogenous growth;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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