Chapter Five

Beyond Comparative Advantage: Empirical Evidence and New Trade Theories

Copyright © 2006 South-Western/Thomson Learning

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Table 1: The Leontief Paradox

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Table 2: Leamer’s Reformulation of Leontief Test, Corrected For Unbalanced U.S. Trade

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Table 3: Intra-Industry Trade Indexes, 1985

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Figure 1: Location Can Cause Intra-Industry Trade in Homogeneous Goods

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Table 4: Ratio of Merchandise Trade to Merchandise Value-Added, 1980, 1990, 2000 (Percent)

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Figure 2: Internal and External Scale Economics

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Figure 3: Mutually Beneficial Trade Based Solely on Scale Economies

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Figure 4: Internal Scale Economies as a Basis for Trade Between Identical Countries

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Figure 4a: Internal Scale Economies as a Basis for Trade Between Identical Countries

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Figure 4b: Internal Scale Economies as a Basis for Trade Between Identical Countries

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Figure 4c: Internal Scale Economies as a Basis for Trade Between Identical Countries

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Figure 4d: Internal Scale Economies as a Basis for Trade Between Identical Countries

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Figure 5: External Scale Economies and Comparative Advantage

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Figure 6: Interaction of External Scale Economies and Comparative Advantage

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Figure 7: Dynamic External Economies and the Learning Curve

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Figure 8: Similar Tastes and Trade: The Overlapping-Demand Hypothesis

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Figure 9: Direction of MerchandiseExports, 2001

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Figure 10: Transportation Costs and the International Market for Good X

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Figure 11: Elasticities of Scale by Industry

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Figure 12: Asia-U.S. Trade Routes