Production structure and international trade (Q1187674): Difference between revisions

(The modern theory of international trade is based on two representative frameworks. One is the Ricardian model and the other is the Hecksher- Ohlin-model. Which one should be employed depends on the purpose of the analysis. In this book, relaxing some assumptions imposed on the production technologies and on the properties of goods and factors, the author investigates the patterns of trade, the gains from trade and the robustness of the well known results such as the Stolper-Samuelson, Rybczynski and factor price equalization theorems. In Chapter 1, allowing for the possibility that some factors are sector- specific, the stability of a two-country trade equilibrium was shown under an input adjustment process. The conditions for the stability of the dynamic process with instantaneous adjustment in some markets as well as with inflexible adjustment in some other markets are derived in Appendix I. The problem does not seem to have been discussed in the literature so far. Chapters 2 and 3 are concerned with the influence of external economies in production (variable returns to scale) on the various trade theorems, the pattern of specialization and the gains from trade. Chapter 4 deals with the case of public intermediate goods which cause another kind of production externality. The properties of the production set play a key role in this analysis; the properties of production frontiers in a context of public inputs and the basic theorems of nonlinear programming are described in Appendix II. Finally Chapter 5 examines the case of natural resources and the dynamic aspect of international trade. The importance of this book consists not only in the analysis of how differences in production structure influence the traditional theories of international trade but also in its provision of bases for the analysis of market structures.