The evolution of international trade theories in the 20 th –21 st centuries

Aleksei S. Kozyrev ()

Economics of Contemporary Russia, 2024, issue 4

Abstract: The article examines the development of international trade theories in the 20th and 21st centuries, starting from classical and neoclassical theories and culminating in new approaches that take into account the contemporary realities of the global economy. The primary focus is on the evolution of theories, beginning with the works of Swedish economists E. Heckscher and B. Ohlin, who laid the foundation for the factor proportions theory. The further development of international trade theory is associated with the works of W. Stolper and P. Samuelson, who, in their Stolper–Samuelson theorem, established a connection between factor prices and the demand for goods under free trade. The article also examines approaches to international trade developed by such scholars as B. Balassa, H. Grubel, C. Lancaster, and E. Helpman. This article also explores the modern theory of international trade that was developed in the late 20th and early 21st centuries, closely linked to the contributions of P. Krugman. Unlike classical and neoclassical models, this new theory is based on the idea of monopolistic competition and takes into account both the preferences of economic agents and the effects of economies of scale. Krugman’s framework suggests the existence of monopolistic competition, characterized by markets with a wide variety of differentiated products, where firms lack significant market power. The article explains the progression of international trade theories, moving from classical models focused on comparative advantages and factor endowments to more advanced and realistic models that consider imperfect competition and other contemporary economic realities.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ack:journl:y:2024:id:1039

DOI: 10.33293/1609-1442-2024-4(107)-128-140

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