New Trade Theory
E880995
New Trade Theory is an economic framework that explains international trade patterns through economies of scale, imperfect competition, and product differentiation, showing how similar countries can benefit from trading similar goods.
Statements (47)
| Predicate | Object |
|---|---|
| instanceOf |
economic theory
ⓘ
international trade theory ⓘ |
| addresses |
home-market effect
ⓘ
industrial concentration in large economies ⓘ role of market size in trade patterns ⓘ |
| associatedWith |
Avinash Dixit
NERFINISHED
ⓘ
Elhanan Helpman NERFINISHED ⓘ Kelvin Lancaster NERFINISHED ⓘ Paul Krugman NERFINISHED ⓘ |
| assumes |
firms have market power
ⓘ
presence of scale economies at firm level ⓘ products are differentiated ⓘ |
| contrastsWith |
Heckscher–Ohlin model
NERFINISHED
ⓘ
Ricardian trade theory ⓘ classical trade theory ⓘ |
| critiquedFor |
limited treatment of firm heterogeneity
ⓘ
reliance on specific functional forms ⓘ |
| developedIn |
1980s
ⓘ
late 1970s ⓘ |
| emphasizes |
increasing returns to scale
ⓘ
monopolistic competition ⓘ role of market structure in trade ⓘ strategic interaction between firms ⓘ |
| explains |
gains from trade between similar countries
ⓘ
intra-industry trade ⓘ why similar countries trade similar goods ⓘ |
| extendedBy | New New Trade Theory NERFINISHED ⓘ |
| field | international economics ⓘ |
| focusesOn |
economies of scale
ⓘ
imperfect competition ⓘ international trade patterns ⓘ product differentiation ⓘ |
| influenced |
New Economic Geography
NERFINISHED
ⓘ
strategic trade policy literature ⓘ |
| keyPublication | Increasing Returns, Monopolistic Competition, and International Trade NERFINISHED ⓘ |
| keyPublicationAuthor | Paul Krugman NERFINISHED ⓘ |
| keyPublicationYear | 1979 ⓘ |
| relatedConcept |
Dixit–Stiglitz model
NERFINISHED
ⓘ
Krugman model of trade NERFINISHED ⓘ monopolistic competition model of trade ⓘ |
| shows |
trade can arise without factor endowment differences
ⓘ
trade can increase variety of goods available to consumers ⓘ trade can lower average costs through larger markets ⓘ |
| supports |
intra-industry trade between similar economies
ⓘ
trade in differentiated manufactured goods ⓘ |
| usedBy |
international organizations
ⓘ
policy analysts ⓘ |
Referenced by (2)
Full triples — surface form annotated when it differs from this entity's canonical label.