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Explaining the Volume of Trade: An Eclectic Approach
Abstract
Divide the world into a capital-abundant North and a labor-abundant South. Subdivide the North into two identical regions, East and West.Modern trade theory predicts intraindustry trade in differentiated manufactured goods between East and West, and traditional interindustry trade based on factor endowments between North and South. But the theory offers no conclusions about the volume of trade , and gives no real role to demand in determining trade flows. The model developed here explains both the volume and the direction of trade by combining nonhomothetic preferences with scale economies and differences in endowments. Copyright 1986 by American Economic Association.
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Citations
Cited by
Yeaple, S. R. (2003) · Journal of International Economics · doi:10.1016/s0022-1996(02)00051-x · Cited by 540
Migrant networks and foreign direct investment
Javorcik, B. S., Özden, Ç., Spatareanu, M., & Neagu, C. (2011) · Journal of Development Economics · doi:10.1016/j.jdeveco.2010.01.012 · Cited by 499
Nonhomotheticity and Bilateral Trade: Evidence and a Quantitative Explanation
(2011) · Econometrica · doi:10.3982/ecta8346 · Cited by 349
Metadata
- Authors
- MARKUSEN, J. R.
- Venue
- World Scientific Studies in International Economics
- Publisher
- WORLD SCIENTIFIC
- Published
- 2021-03
- Pages
- 177-186
- ISSN
- 1793-3641 (ISSN-L)
- OpenAlex
- W1531390412
- Cited by
- 267
- References
- 0
- FWCI
- 19.23
- Type
- book chapter
- Language
- en
- Open access
- closed
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