New Theory of International Trade and New Economic Geography (Nobel Prize in Economics 2008)

2009 ◽  
pp. 68-83
Author(s):  
N. Volchkova
Keyword(s):  
International Trade ◽  
Nobel Prize ◽  
Economic Geography ◽  
Organization Theory ◽  
Monopolistic Competition ◽  
Returns To Scale ◽  
New Economic Geography ◽  
Increasing Returns To Scale ◽  
Standard Models ◽  
Industrial Organization Theory

The paper reviews Paul Krugman’s contributions that earned him Nobel Prize in Economics of 2008 and grounded two fields of economic theory — new theory of international trade and new economic geography. The paper shows how the assumption of internal increasing returns to scale and monopolistic competition borrowed by Krugman from the industrial organization theory changed the conclusions of standard models and enriched our understanding of international trade and spatial distribution of economic activity.

scholarly journals Road infrastructure and intra-community trade in the Central African Economic and Monetary Community

2022 ◽  
Vol 10 (01) ◽  
pp. 2905-2913
Author(s):  
Serge KAMGAING ◽  
Jean Claude SAHA ◽  
Yves André ABESSOLO
Keyword(s):  
International Trade ◽  
Theoretical Prediction ◽  
Gravity Model ◽  
Economic Geography ◽  
International Economics ◽  
Trade Flow ◽  
New Economic Geography ◽  
Positive Contribution ◽  
Road Infrastructure

We examine the contribution of domestic and interstates road infrastructures to trade flow between member countries of the Central African Economic and Monetary Community (CEMAC). Theories of international economics as well as those of the new economic geography suggest a positive contribution of both road infrastructures to intraregional trade. A gravity model of international trade is estimated to evaluate this theoretical prediction in the CEMAC zone. Results confirm a positive contribution of interstate road infrastructure to intra-Community trade, but show no evidence of a positive contribution of domestic road infrastructure to intra- CEMAC trade.

scholarly journals Ersetzt die Neue Ökonomische Geographie Außenwirtschaftstheorie und Raumwirtschaftstheorie?

2011 ◽  
Vol 62 (3) ◽  
Author(s):  
Klaus Schöler
Keyword(s):  
Economic Geography ◽  
Economies Of Scale ◽  
Monopolistic Competition ◽  
Regional Economics ◽  
New Economic Geography ◽  
Traditional Theory ◽  
Transport Costs ◽  
Trade Theory ◽  
Heterogeneous Goods ◽  
The One

SummaryThe New Economic Geography has two advantages in comparison with the traditional Theory of International Trade. On the one hand, the transport costs are included into the respective models. On the other hand, the factor endowment in the regions or countries is not given in the same way as in the traditional Trade Theory, but it is a result of different transport costs. The New Economic Geography has also great advantages in the field of Regional Economics. It is possible to explain the phenomenon of agglomerations by means of a total microeconomic model with economies of scale in one industry, monopolistic competition and heterogeneous goods. The New Economic Geography completes the traditional theories - Trade Theory and Regional Economics - in important aspects, but does not yet replace these approaches.

Comment on ‘Competition Tests with a Non-Structural Model: The Panzar–Rosse Method Applied to Germany’s Savings Banks’

2011 ◽  
Vol 12 (2) ◽  
pp. 239-241
Author(s):  
Manfred Neumann
Keyword(s):  
Public Interest ◽  
Structural Model ◽  
Monopolistic Competition ◽  
Returns To Scale ◽  
Increasing Returns ◽  
Free Entry ◽  
Recent Issue ◽  
Increasing Returns To Scale ◽  
The Public ◽  
Savings Banks

Abstract In a recent issue of this journal Gischer and Stiele (2009) applied the ‘Test for ‘‘Monopoly’’ Equilibrium’ advanced by Panzar and Rosse (1987) to German savings banks and came up with the claim that savings banks maximize profits under conditions of monopolistic competition in the meaning of Edward Chamberlin. Their proposition is not conclusive since it would require free entry and for savings banks to operate under increasing returns to scale. Available evidence, however, shows them being subject to constant or decreasing returns to scale. The empirical findings of Gischer and Stiele can more convincingly be explained by assuming savings banks abide by their legal goals to pursue the public interest.

scholarly journals Trade and Development in a Labor Surplus Economy

2007 ◽  
Vol 7 (1) ◽  
Author(s):  
Edward B Barbier ◽  
Michael Rauscher
Keyword(s):  
Labor Market ◽  
Monopolistic Competition ◽  
Home Country ◽  
Agricultural Productivity ◽  
Returns To Scale ◽  
Utility Functions ◽  
Increasing Returns ◽  
Increasing Returns To Scale ◽  
Welfare Implications ◽  
Labor Surplus

Abstract This paper looks at a model in which two countries trade agricultural and manufactured commodities. The manufactured-goods sector produces with increasing returns to scale under conditions of monopolistic competition. It is shown that an increase in land endowment (or an increase in agricultural productivity) can have negative welfare implications for both countries. This outcome can result under three different scenarios: asymmetries across countries, i.e. a North-South model, a neoclassical labor market instead of a Lewisian market in the home country, and alternative utility functions.

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