New
Trade Theories
Research in
international trade theory has focused since the early 1980s on the
implications of relaxing the assumption of perfect markets to account
for effects of imperfect competition, strategic behaviour and
economies of scale. More recently, there has been a remarkable
flourishing of empirical research to test such theories, while policy
developments including economic integration in Europe and North
America and the rapid transformation in Central and Eastern Europe
have provided a further impetus to applied research. A joint
conference with the Centro Studi sui Processi di
Internazionalizzazione (CESPRI) at Università Bocconi, Milano, on
`New Trade Theories: A Look at the Empirical Evidence' on 27/29 June
provided an opportunity for a comprehensive overview of the most
recent empirical research in this field. The conference was organized
by Riccardo Faini, Professor of Economics at the Università di
Brescia and Research Fellow in CEPR's International Trade programme,
and Fabrizio Onida, Director of CESPRI and Professor of
Economics at the Università Bocconi. It formed part of CEPR's
research programme on `Market Integration, Regionalism and the Global
Economy', supported by a grant from the Ford Foundation. The following
papers were presented:
`Empirical Evidence on the New Trade Theories: The Current State of
Play', Paul Krugman (MIT and CEPR)
`Static Heckscher-Ohlin Models of Partial Economic Integration', Edward
Leamer (University of California, Los Angeles)
`Protection and Real Wages: Old and New Trade Theory and Their
Empirical Counterparts', Robert M Stern and Alan V Deardorff
(University of Michigan) and Drusilla K Brown (Tufts
University)
`An Empirical Model of Sunk Costs and the Decision to Export', James
R Tybout (Georgetown University) and Mark Roberts
(Pennsylvania State University)
`Exchange Rate Regimes and Trade Prices: Does the EMS Matter?', André
Sapir (Commission of the European Communities, Université Libre
de Bruxelles and CEPR) and Khalid Sekkat (Université Libre de
Bruxelles)
`The Impact of the 1986 US-Japan Semiconductor Arrangement', Richard
Baldwin (Graduate Institute of International Studies, Geneva, and
CEPR)
`Industrial Policy in the Presence of Wage Distortions: The Case of
the US Auto and Steel Industries', Jaime de Melo (Université
de Genève, World Bank and CEPR) and David Tarr (World Bank)
`Monopolistic Competition and International Trade: Reconsidering the
Evidence', James A Levinsohn and David Hummels
(University of Michigan)
`Do Low-Income Countries Have a High-Wage Option?', Dani Rodrik
(Columbia University and CEPR)
`The Determinants and Impacts of Antidumping Suit Petitions in the
United States: An Industry Level Analysis', Robert W Staiger
and Frank Wolak (Stanford University)
`Learning and Dynamic Comparative Advantage: Lessons from Austria's
Postwar Pattern of Growth for Eastern Europe', Dalia Marin (Institut
für Höhere Studien, Wien, and CEPR)
`Trade Elasticities, Specialization and Growth Potential', Carlo
Andrea Bollino (Ente Nazionale Idrocarburi) and Pier Carlo
Padoan (Università degli Studi di Roma)
A report of this conference will be published by CEPR in October,
containing a review essay covering the main issues by David Dodwell,
World Trade Editor of the Financial Times, the above survey paper by Paul
Krugman, and the authors' own non-technical summaries of the
remaining papers.
Copies of New
Trade Theories: A Look at the Empirical Evidence will be available
for £10.00/$15.00 (postage and packing included) from CEPR,
90-98 Goswell Road, London EC1V 7RR. Fax: 44 20 7878 2999