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The Pure Theory of International Trade: A Survey

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Surveys of Economic Theory

Abstract

This chapter surveys that branch of international trade theory which, following Marshall, is generally described as “pure.” This epithet separates it from “monetary” theory. It is not to be taken to imply exceptional esotericism and abstraction from the problems of the real world. Indeed, I propose to give prominence to that part of the growing, new literature in pure theory which attempts explicitly to bring the theory on to the ground—through empirical verification of testable propositions, through measurement of the gains and losses from changes in trade policy and through the formulation of analytical and operational models to assist the developmental planning that is becoming a key characteristic of the developing nations.

The author is Professor in the Delhi School of Economics of Delhi University. This survey was partly written when I was with the Indian Statistical Institute. For correspondence and/or discussions, I am thankful to Professors H. G. Johnson, R. W. Jones, C. P. Kindleberger, B. S. Minhas, P. A. Samuelson and T. N. Srinivasan. V. Balasubramanian and R. Tagat have assisted with the computational work. [I have taken the opportunity provided by reprinting to add a few references to contributions that have appeared since 1964. These have been made in footnotes within square brackets; see Addendum, p. 239.]

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  147. [A recent paper by Oniki and Uzawa, “ Patterns of Trade and Investment in a Dynamic Model of International Trade,” Review of Economic Studies Vol 32 (January 1965), contributes a rigorous analysis of the interaction of capital accumulation and the trade pattern in a two-country world.]

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© 1965 The Royal Economic Society and the American Economic Association

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Bhagwati, J. (1965). The Pure Theory of International Trade: A Survey. In: Surveys of Economic Theory. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-00460-7_3

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