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In recent years, international trade has become a subject of increaed practical importance and also one of the most intellectually exciting parts of economics. In his introduction to this volume, Paul Krugman outlines why this is so, by analysing the original contribution of the New Trade Theory in interpreting and explaining the observed trade behaviour of the past twenty years.
Then follow sections which discuss: formal tests of the New Trade Theory, Price Discrimination and Exchange Rate, as well as New Protectionism, measures of Comparative Advantages and Import Demand in industrialized and developing countries.
Some chapters also use GCE models to evaluate Trade Protectionism, while others encompass External Trade within aggregate Disequilibrium Models.
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