In recent decades international trade theory has not been very helpful, overall,
in explaining the causes and effects of contemporary trade flows. This has
been due, first, to trade theory continuing to refer to the Ricardian principle of
comparative advantage, which is based on a number of irrealistic hypotheses
such as full employment and trade balances’ equilibrium. And, second, to the
fact that the non-satisfaction of key Ricardian hypotheses has hindered the
working of trade balance re-equilibrating mechanisms; as a result, countries’
absolute advantages, possibly more than comparative ones, appear to determine
countries’ trade flows.
This book, using plain language that makes it accessible to non-economists, offers
a new perspective, describing some recent lines of research that throw light
on the key determinants and the main problems of the contemporary structure
of international trade, such as power relations and the role of standards and
networks. One of the aims is to show the crucial importance of non-economic
forces – historical, political and technological – in shaping countries’ trade
flows and countries’ position in the international economic hierarchy.
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Massimo Roccas worked as an international economist and economic historian at the Bank of Italy, where he was in charge of the Bank’s economic publications and was Deputy Head of the Research Department.
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