Abstract
Before discussing the neoclassical model of international trade, it is as well to introduce some widely-used diagrammatic tools and to show how the general equilibrium of production and consumption is determined in a simple closed economy, where two goods (A and B) are produced by the full employment of two primary1 factors of production (K and L). The given data are:
-
(a)
the total amounts of the two factors existing in the economy;
-
(b)
the distribution of these among the members of the economy, namely the amounts of K and L owned by each member;
-
(c)
the state of technology, represented by well-behaved aggregate production functions; (d) the tastes of consumers.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Bhagwati, J.N. and T.N. Srinivasan, 1983, Lectures on International Trade, Cambridge (Mass.), MIT Press
Chacholiades, M., 1978, International Trade Theory and Policy, New York, McGraw-Hill
Chipman, J.S., 1965b, A Survey of the Theory of International Trade: Part 2, The Neoclassical Theory, Econometrica 33, 685–760
Diewert, W.E., 1974, Applications of Duality theory, in: M.D. Intriligator and D.A. Kendrick (eds.), Frontiers of Quantitative Economics, Amsterdam, North-Holland, Chap. 3
Diewert, W.E., 1982, Duality Approaches to Microeconomic Theory, in:. K.J. Arrow and M.D. Intriligator (eds.), Handbook of Mathematical Economics, Amsterdam, North-Holland, Vol. II, Chap. 12
Dixit, A.K. and V. Norman, 1980, Theory of International Trade: A Dual, General Equilibrium Approach, Cambridge University Press
Edgeworth, F.Y., 1894, The Theory of International Values, I, II, III, Economic Journal 4, 35–50, 424–443, 606–638; reprinted in: F.Y. Edgeworth, 1925, Papers Relating to Political Economy, London, Macmillan, Vol. II, 3–60
Edgeworth, F.Y., 1905, Review of H. Cunynghame’s Book “A Geometrical Political Economy”, Economic Journal 15, 62–71. Reprinted in: F.Y. Edgeworth, 1925, op. cit., Vol. III, 136–144
Findlay, R., 1970, Trade and Specialization, Hardmondsworth, Penguin
Gandolfo, G., 1980, Economic Dynamics: Methods and Models, Amsterdam, North-Holland
Helpman, E., 1984b, Increasing Returns, Imperfect Markets, and Trade Theory, in: R.W. Jones and P.B. Kenen (eds.), Chap. 7
Henderson, J.M. and R.E. Quandt, 1980, Microeconomic Theory: A Mathematical Approach, 3rd ed., New York, McGraw-Hill
Herberg, H., 1969, On the Shape of the Transformation Curve in the Case of Homogeneous Production Functions, Zeitschrift für die gesamte Staatswissenschaft 125, 202–210
Herberg, H., M.C. Kemp and M. Tawada, 1982, Further Implications of Variable Returns to Scale, Journal of International Economics 13, 65–84
Jones, R.W., 1965, The Structure of Simple General Equilibrium Models, Journal of Political Economy 73, 557–572; reprinted in: R.W. Jones, 1979, Chap. 4; and in: J.N. Bhagwati (ed.), 1981, Chap. 3
Kemp, M.C., 1964, The Pure Theory of International Trade, Englewood Cliffs (N.J.), Prentice Hall
Kemp, M.C., 1969b, The Pure Theory of International Trade and Investment, Englewood Cliffs (N.J.), Prentice Hall
Krauss, M.B., 1979, A Geometric Approach to International Trade, Oxford, B. Blackwell
Marshall, A., 1879, 1930, The Pure Theory of Foreign Trade (privately circulated in 1879; reprinted in 1930 and subsequently by London School of Economics, Reprints of Scarce Tracts on Political Economy, London, Lund Humphries)
Marshall, A., 1923, Money, Credit and Commerce, London, Macmillan.
Mosak, J.L., 1944, General-Equilibrium Theory in International Trade, Cowless Commission Monograph No. 7, Bloomington (Indiana), Principia Press
Negishi, T., 1972, General Equilibrium Theory and International Trade, Amsterdam, North-Holland
Nikaidô, H., 1956, On the Classical Multilateral Exchange Problem, Metroeconomica 8, 135–145; reprinted in: P.K. Newman (ed.), 1968, 116–126
Nikaidô, H., 1957, A Supplementary Note to “On the Classical Multilateral Exchange Problem”, Metroeconomica 9, 209–210; reprinted in: P.K. Newman (ed.), 1968, 127–128
Samuelson, P.A., 1947, Foundations of Economic Analysis, Harvard University Press (enlarged edition, 1983)
Savosnick, K.M., 1958, The Box Diagram and the Production Possibility Curve, Ekonomisk Tidskrift 60, 183–197
Vanek, J., 1962, International Trade: Theory and Economic Policy, Homewood (Ill.), Irwin
Viner, J., 1937, Studies in the Theory of International Trade, New York, Harper & Brothers
Woodland, A.D., 1982, International Trade and Resource Allocation, Amsterdam, North-Holland
Yntema, T.O., 1942, A Mathematical Reformulation of the General Theory of International Trade, University of Chicago Press
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1986 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Gandolfo, G. (1986). The Neoclassical Theory of International Trade. In: International Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-07976-8_3
Download citation
DOI: https://doi.org/10.1007/978-3-662-07976-8_3
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-662-07978-2
Online ISBN: 978-3-662-07976-8
eBook Packages: Springer Book Archive