New Trade Theories

A Look at the Empirical Evidence

Release Date: May 1, 1994

Research in international trade theory has focused since the early 1980s on the implications of relaxing the assumption of perfect markets to account for the 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.

This is a report of a conference on these new trade theories, held in May 1993, and organized by CEPR and the Centro Studi Sui Processi di Internazionalizzazione (CESPRI) at Bocconi University in Milan. It constitutes an overview of the most recent empirical research in this field, containing a review essay by David Dodwell, World Trade Editor of the Financial Times, a survey paper by Paul Krugman of MIT and non-technical summaries of the remaining papers presented.

CEPR books are not available through Brookings in the UK and Europe.