Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of technical notes
- List of special interest boxes
- List of symbols
- List of parameters
- Preface
- Suggested course outline
- 1 A first look at geography, trade, and development
- 2 Geography and economic theory
- 3 The core model of geographical economics
- 4 Solutions and simulations
- 5 Geographical economics and empirical evidence
- 6 Refinements and extensions
- 7 Cities and congestion: the economics of Zipf's Law
- 8 Agglomeration and international business
- 9 The structure of international trade
- 10 Dynamics and economic growth
- 11 The policy implications and value-added of geographical economics
- References
- Index
9 - The structure of international trade
- Frontmatter
- Contents
- List of figures
- List of tables
- List of technical notes
- List of special interest boxes
- List of symbols
- List of parameters
- Preface
- Suggested course outline
- 1 A first look at geography, trade, and development
- 2 Geography and economic theory
- 3 The core model of geographical economics
- 4 Solutions and simulations
- 5 Geographical economics and empirical evidence
- 6 Refinements and extensions
- 7 Cities and congestion: the economics of Zipf's Law
- 8 Agglomeration and international business
- 9 The structure of international trade
- 10 Dynamics and economic growth
- 11 The policy implications and value-added of geographical economics
- References
- Index
Summary
Introduction
Untill recently, the modern literature on geography and trade paid relatively little attention to the relationship between agglomerating and spreading forces on the one hand and the structure and volume of (international) trade on the other. International trade flows are undoubtedly largely determined by the spatial distribution of economic activity. Taking the core (symmetric) two-country model of chapters 3 and 4 as a point of departure, the predictions on the structure and size of trade flows are simple. If economic activity is evenly spread, food is not traded internationally, so there is only intra-industry trade of manufactures between the two countries. If there is complete agglomeration of manufacturing activity, the only other possible long-run outcome, there is exclusively inter-industry trade (food for manufactures) between the two countries. Although these basic predictions are in line with empirical observations, that is trade is large between similar countries and dominated by intra-industry trade (see Box 9.1), the basic structure is too extreme in its predictions and too rigid in structure to allow for different types of international trade flow. The objective of this chapter is to demonstrate how international trade models may be combined with the geographical economics structure to allow for a diversified and rich explanation of international interactions. In doing so it partially fills the gap in the literature observed by Bertil Ohlin in 1933, namely the need to develop a theory of location which may serve as a background for a theory of international trade; see chapter 1.
- Type
- Chapter
- Information
- An Introduction to Geographical EconomicsTrade, Location and Growth, pp. 245 - 273Publisher: Cambridge University PressPrint publication year: 2001