Classical Theory Of International Trade Research Articles

Crítica a la Teoría Clásica del Comercio Internacional, un enfoque de equilibrio general entre país grande y país pequeño

Adam Smith's absolute advantage theory as weel as David Ricardo compartive advantage state that international trade could be mutually beneficent for the countries that make trade in presence of absolute advantage of any good or at least if there is comparative advantage. By adding social indifference curves by country and production possibilities frontier inside an general equilibrium diagram which we call international Edgeworth box, we show that the former statement is true in the case in which both countries have roughly the same size and that have absolute advantage in the production of one good. Nevertheless, things get complicated when countries have comparative advantage, but no absolute. If we add a difference in the size of country, it is absolutely necessary to rethink the classical theory of international trade, since from the approach of pure theory, there are no elements that exist mutually beneficent interchange between countries.

The classical theory of international trade after Sraffa

L’objet de l’article est double. D’une part, il évalue l’influence de l’ouvrage de Sraffa (1960) à la fois dans les critiques de la théorie d’Heckscher-Ohlin-Samuelson et dans les tentatives d’élaboration d’une approche néo-ricardienne du commerce international. D’autre part, il analyse l’apport de Sraffa (1930) à l’interprétation du principe de l’avantage comparatif et ses conséquences sur la théorie classique du commerce international. Il conclut en montrant que l’originalité de la théorie classique réside dans le rôle que les auteurs attribuent au commerce extérieur dans le développement de la division du travail.

Size Does Matter: International Trade and Population Size

Classical theory of international trade has long advocated trade liberalization and open borders. However, this process is not necessarily beneficial to all countries involved. This paper focuses on two modeled economies that initially share the same technology and per-capita income, but differ in population size. With trade, the profit of the large duopolist is reduced to the benefit of the duopoly in the smaller country, as the large country is no longer able to benefit from its larger population. This may explain why one country would want to open trade with high barriers while another country would prefer low barriers.

Oligopoly and the Classical Theory of International Trade

Oligopoly and the Classical Theory of International Trade

Trade without specialization?

During the post-World War II period international trade has grown mostly among the industrial countries, and especially among the charter members of the European Coal and Steel Community and the Common Market. The growth of this trade has not been associated with the kind of specialization postulated by the classical theory of international trade. Rather, the industrial structures of the Common Market members were becoming more similar. In the case of West Germany, an ever increasing share of her foreign trade came to consist of an exchange of the same type of commodities. This resulted partly from an international specialization in competitive, but not identical goods—as in the passenger car industry. In many cases, however, the goods exchanged were perfect substitutes for each other—as coals for electric power stations, gasolines differing only in brand name, or surplus wheat received from France and exported by West Germany to countries outside the Common Market. Explanations of trade flows among industrial countries based solely on classical trade theory are becoming increasingly unrealistic and irrelevant.

Commercial Policy and Industrialization

What I propose to do in this lecture is to survey developments in the theory and practice of commercial policy, with general reference to the potential role of commercial policy in promoting economic development, and with special reference to the question of its potential service to this objective in small developing countries such as Panama. I claim no special, or even any, knowledge of the Panamanian economy; but I have both visited and studied a number of comparably small developing economies elsewhere. I begin with a brief and impressionistic survey of the theory and history of tariffs. The mercantilist economists favoured the use of interventions of various kinds in international trade primarily as a means of accumulating precious metals for the treasure of the state, but also as a means of building up a nation's population and therefore its political and military power as then conceived-and weakening the power of other nations. The classical economists reacted against and destroyed-at least intellectually-the mercantilist view of the world, by developing two basic principles of economics. The first was David Hume's price-specie-flow mechanism, according to which in the long run a nation has no control over the quantity of the domestic money supply-which in those days was also its stock of precious metalsbecause the public can export or import money in exchange for imports or exports of domestic goods and services. (In the modern world, the same principle applies; but a nation can control the ratio of its international reserves to its domestic money supply, and therefore the amount of its international reserves, through the control its central bank can exercise over the volumes of domestic credit outstanding against its money supply. Also, the public can adjust actual to desired money supply through international transactions in securities as well as in goods and services.) The second was Adam Smith's principle of specialization and division of labour, which as applied to international trade clearly implied that free trade rather than governmental intervention in trade was the welfare-maximizing policy for a country to follow. The subsequent development of the classical theory of international trade admitted only two important exceptions to the general optimality of a free trade policy. The first was the optimum-tariff argument: the possibility that by means of a tariff a country could exploit monopoly or monopsony power and turn its terms of trade in its favour at the expense of restricting its trade volume. The logic of this possibility had

Progrès technique et bien-être international

The classical theory of international trade has enjoyed a renewal of favour since the recent works of Professors Ohlin and Samuelson. Their conclusions and optimism however seem dangerous : in the absence of protection , technical progress in a developed country will aggravate the inequa¬ lity of the international distribution of wealth and income , by delaying technical progress in the under -developed countries. If the dominant country enjoys continuous progress , the dominated countries will see the comparative value of their most abundant factors decline. If, on the other hand, progress is random and unexpected, further dangers will threaten the other countries : recurrent monetary upheavals, an increase of inflationary pressure. These dangers will have a depressing influence.

Frank D. Graham and the Classical Theory of International Trade

Frank D. Graham and the Classical Theory of International Trade

The Gains from International Trade

[1] In a recent paper the thesis was advanced that while it is not possible to demonstrate rigorously that free trade is better (in some sense) for a country than all other kinds of trade, it nevertheless can be shown conclusively that (in a sense to be defined later) free trade or some trade is to be preferred to no trade at all. I should like here to amplify these remarks with respect to the last point, that some trade is better than no trade.This is by no means a novel proposition. Indeed, it can be traced back to the beginnings of the Classical theory of international trade. It has become associated, however, quite unnecessarily in my opinion, with a labour theory of value, or a “real cost” theory of value, or more recently, with an opportunity cost theory of value. All of these have come in for considerable criticism in recent years as restrictive special cases of the so-called theory of general equilibrium. Those writers who have insisted on the need for a modern theory of value for a positive description of behaviour in international trade have in general ignored the normative aspects of international trade, presumably in the belief that as soon as one gives up the inadmissible special theories indicated above, nothing can be said concerning this problem. It will be argued here that this is a mistake, that from the most general theories of equilibrtlim all valid normative propositions can be derived.