International Trade Theories within a Unified Framework
Abstract
A framework is developed which reduces to the three most popular models of international trade under different sets of assumptions. The key intuition is to focus on differences in per unit costs of production as determinants of trade patterns. This focus on per-unit costs clearly defines the links between between the Ricardian, the Hecksher-Ohlin, and the Economies of Scale Trade Theories. Examining the assumptions that are sufficient (but not necessary) for each case to hold provides a foundation which Facilitates student understanding. Students of international trade can see how these theories are inter-related, instead of viewing them in isolation as in the standard textbook expositions.
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