International Trade: New Patterns of Trade, Production & Investment

By Nigel Grimwade | Go to book overview

of decreasing average costs, so that strong support for lower barriers to trade can be expected. These issues are explored in more depth in Chapter 8.


Notes for Further Reading

There now exists a large and growing theoretical and empirical literature on the subject of intra-industry trade. One of the earliest works on this subject was:

Grubel, H. and Lloyd, P.J. Intra-Industry Trade—The Theory and Measurement of International Trade in Differentiated Products (London and Basingstoke: The Macmillan Press, 1975).

An excellent, more recent text covering the entire subject matter is:

Greenaway, D. and Milner, C. The Economics of Intra-Industry Trade (Oxford: Basil Blackwell, 1986).

On the theory of intra-industry trade, the most important contributions remain the following:

Brander, J. 1981. A Intra-Industry Trade in identical commodities, Journal of International Economics,11, pp. 1-14.

Brander, J.A. and Krugman, P. 1983. A reciprocal dumping model of international trade , Journal of International Economics,13, pp. 313-21.

for the reciprocal dumping model. For models of horizontal intra-industry trade, the most important contributions are the following:

Lancaster, K. 1980. Intra-industry trade under perfect monopolistic competition, Journal of International Economics,10, pp. 151-76.

Helpman, E. 1981. International trade in the presence of product differentiation, economies of scale and monopolistic competition, Journal of International Economics,11, pp. 305-40.

Dixit, A.K. and Stiglitz, J. 1977. Monopolistic competition and optimum product diversity, American Economic Review,67, pp. 297-308.

Krugman, P. 1979. Increasing returns, monopolistic competition and international trade, Journal of International Economics,9, pp. 469-79.

Krugman, P. 1980. Scale economies, product differentiation and the pattern of trade, American Economic Review,70, pp. 950-59.

Krugman, P., Trade in differentiated commodities and the political economy of trade liberalisation, in Bhagwati, J. (ed.), Import Competition and Response (Chicago: University of Chicago Press, 1982).

Venables, A.J., 1984. Multiple equilibria in the theory of international trade with monopolistically competitive industries, Journal of International Economics,16, pp. 103-21.

Dixit, A.K. and Norman, V., Theory of International Trade (Cambridge: Cambridge University Press, 1980).

For vertical intra-industry trade, the interested reader should refer to the following:

Falvey, R.E. 1981. Commercial policy and intra-industry trade, Journal of International Economics,11, pp. 495-511.

Falvey, R.E. and Kierzkowski, H., Product quality, intra-industry trade and imperfect competition, Discussion paper, Graduate Institute of International Studies, Geneva, 1984.

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