Trade Patterns and Dynamics

The book has been organized in the order that is characterized of evolution of international trade theory. First we are concerned with static competitive trade theory. Then, we study static monopolistic trade theory. Both competitive and monopolistic competitive trade theories can be classified further by global factor mobility and immobility. After examining the basic ideas of static trade theories, we extend the static vision to the dynamic one. We are concerned with endogenous growth of two factors, capital and knowledge. Again, we divide the theories into perfectly competitive and monopolistically competitive economies. The perfectly competitive economy under government intervention is basically based on Zhang’s approach. In this approach, both knowledge growth and capital accumulation are analyzed in a single compact framework. The models of monopolistic competition are mainly concerned with growth, trade and innovation. In this approach, it is not easy to take account of both capital accumulation and innovation within a single framework. In almost all the models of this approach, capital accumulation has been neglected.

The book is focused on the basic economic mechanisms of international trade. We have omitted many important topics in trade theory, even though many of these issues can be discussed with the analytical frameworks and basic concepts used in this book. We now mention a few straightforward directions for extending this book.