On the Transition from Autarky to Trade

L. Mainwaring

Chapter 12 in Fundamental Issues in Trade Theory, 1979, pp 131-141 from Palgrave Macmillan

Abstract: Abstract One of the more striking conclusions to emerge from the alternative trade theory presented in this volume is that the free trade level of consumption per worker may be less than the autarkic level. This appears to conflict with the well-known result, dating back at least as far as Ricardo, which states that free trade is not worse and, in general, is better (in some well-defined sense) than autarky. These apparently contradictory results are both reached on the basis of comparing the autarkic and free-trade equilibria. A number of economists have, however, suggested that no real contradiction is involved once the transition from autarky to trade is taken into account. Indeed, in Essay 4 of this volume it is shown that on certain particular assumptions the ‘inclusive’ measure of the gain from trade will always be positive irrespective of the sign of the steady-state measure. In the conclusion to that Essay attention was drawn to the severity of the assumptions underlying the result.

Keywords: Free Trade; Consumption Good; Trade Theory; Technical Coefficient; Consumption Stream (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_12

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DOI: 10.1007/978-1-349-04378-1_12

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