The Non-Substitution Theorem and International Trade Theory

Ian Steedman and J. S. Metcalfe

Chapter 10 in Fundamental Issues in Trade Theory, 1979, pp 123-126 from Palgrave Macmillan

Abstract: Abstract The object of this brief essay is to suggest that recent work in the field of capital theory has an immediate significance for trade theory in a stationary equilibrium setting. Recent capital theory has emphasised the relationships between income distribution and relative commodity prices rather than any particular theory of the determination of distribution and prices. It may therefore provide the basis for studying important aspects of the theory of trade outside a full neo-classical general equilibrium theory and, indeed, outside any other general theory. We are able to see, for example, that even in the absence of specialisation there is no reason to expect a priori that free trade in commodities will ensure uniformity of real wage and interest rates.

Keywords: Interest Rate; Free Trade; Real Wage; Relative Prex; Trade Theory (search for similar items in EconPapers)
Date: 1979
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-04378-1_10

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DOI: 10.1007/978-1-349-04378-1_10

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