International Trade Theory and Policy: A Review of the Literature

  • Citation: Sen, Sunanda. “International Trade Theory and Policy: A Review of the Literature.” The Levy Economics Institute, no. 635 (2010).
    • Topics:
    • Business and Trade
    • Keywords:
    • comparative costs
    • resource endowment pattern
    • overlapping demand
    • strategic trade
    • new theories of trade
    • trade and development

This paper provides a survey of the literature on trade theory, from the classical example of comparative advantage to the New Trade theories currently used by many advanced countries to direct industrial policy and trade. An account is provided of the neo-classical brand of reciprocal demand and resource endowment theories, along with their usual empirical verifications and logical critiques. A useful supplement is provided in terms of Staffan Linder’s theory of “overlapping demand,” which provides an explanation of trade structure in terms of aggregate demand. Attention is drawn to new developments in trade theory, with strategic trade providing inputs to industrial policy. Issues relating to trade, growth, and development are dealt with separately, supplemented by an account of the neo-Marxist versions of trade and underdevelopment.

Related Resources

  • Alternative Narratives for Arms Control

    Moodie, Amanda, and Michael Moodie. “Alternative Narratives for Arms Control.” The Nonproliferation Review 17, no. 2 (2010): 301–21.

    • Authors with Diverse Backgrounds
    Keywords: arms control, disarmament, Non-Aligned Movement, small arms, treaty regimes, humanitarian action
  • Women in Arms Control: Time for a Gender Turn?

    Dwan, Renata. “Women in Arms Control: Time for a Gender Turn?” Arms Control Today 49, no. 8 (October 2019): 6–11.

    • Open Source Results
    • Authors with Diverse Backgrounds