TY  - JOUR
AU  - Baldwin,Robert E.
TI  - Structural Change and Patterns of International Trade
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2058
PY  - 1986
Y2  - October 1986
UR  - http://www.nber.org/papers/w2058
L1  - http://www.nber.org/papers/w2058.pdf
N1  - Author contact info:
Robert E. Baldwin
University of Wisconsin-Madison
Department of Economics
7321 Social Science Building
1180 Observatory Drive
Madison, WI  53706
Tel: 608/263-7397
Fax: 608/263-3876;608/233-8284
E-Mail: rebaldwi@facstaff.wisc.edu
AB  - This paper focuses on economists' understanding of the basic determinants of trade patterns and, in particular, on the manner in which these underlying factors change over time and are affected by various policies. A brief survey contrasts the determinants of the structure of trade emphasized by the Ricardian, Heckscher-Ohlin, and imperfect competition models and discusses how well the predictions of these various theories are supported by empirical evidence. The main conclusion of the survey is that trade economists have been reasonably successful in explaining the structure of trade at any point in time but much less successful in understanding how the determinants of the patterns of trade change over time. This inability to explain how the basic determinants of the structure of trade change over time can lead both to poor predictions and bad policy advice. Given the increased interest in long-term shifts in trading structures, it is argued that trade economists should enlarge their analytical framework by endogenizing to a greater extent the basic economic factors determining these shifts. They must also recognize the endogenous nature of trade policies in their models, if they are to carry out their predictive and evaluative roles in the best possible manner.
ER  -