Theoretical knowledge of international trade

International trade consists of two parts: import trade and export trade, so it is sometimes called import and export trade. So how much do you know about international trade? The following is organized by me about the theoretical knowledge of international trade, I hope you like it!

Overview of International Trade Theory

The development of international trade theory has roughly gone through four major phases: classical, neo-classical, neo-trade theory, and emerging classical international trade theory.

Classical and neoclassical international trade theories are premised on the assumption of a perfectly competitive market, emphasize the mutual benefits of trade, and mainly explain inter-industry trade.

After the Second World War, the new trade theory emerged with the new situation of global trade, explaining the new trade phenomenon from the perspectives of imperfect competition, economies of scale, and technological progress.

Emerging classical international trade theory explains trade by specialization and division of labor, and tries to unify traditional trade theory and new trade theory within the framework of emerging classical trade theory.

I. Classical International Trade Theory

Classical international trade theory arose in the middle of the 18th century, and was developed on the basis of criticizing mercantilism, including Adam Smith's theory of absolute advantage and David Smith's theory of absolute advantage, and David Smith's theory of absolute advantage and David Smith's theory of absolute advantage. It mainly includes Adam Smith's theory of absolute advantage and David Ricardo's theory of comparative advantage. Adam Smith's theory of absolute advantage and David Ricardo's theory of comparative advantage. Classical trade theory explains the reasons for international trade, its structure and distribution of benefits from the perspective of labor productivity.

(I) Mercantilism

In the late 15th century and early 16th century, during the primitive accumulation of capitalism, the international trade viewpoint of Mercantilism appeared, also known as the theory of trade balance (late mercantilism), whose core is the pursuit of trade surpluses, and whose representative figures include Thomas M. Mang (Thomas Mang) of the United Kingdom. Its core is the pursuit of trade surplus, represented by Thomas Mun of the United Kingdom.

Mercantilism believes that the only form of wealth is gold and silver, and the amount of gold and silver is the only measure of a country's affluence, and the main channel for obtaining gold and silver is international trade. The main channel for obtaining gold and silver was international trade. By rewarding exports and restricting imports, the country would become rich by seeking a surplus and allowing gold and silver to flow in.

(II) Agrarian school

In the second half of the 17th century, in France, there was an opposition to mercantilism, advocating the idea of economic freedom and attaching importance to agriculture, and the formation of agrarian school, whose founder was Fran?ois Quesnay (F. Quesnay), was the founder of the agrarian school. Its founder was F. Quesnay.

The core idea of the physiocratic school was to advocate a free economy, including free trade.

(C) Absolute Advantage Theory

At the end of the 18th century, the mercantilist view of trade was challenged by the classical school of economics, Adam Smith. Adam Smith put forward the theory of absolute advantage in international trade on the basis of the theory of division of labor in production.

In An Inquiry into the Nature and Causes of National Wealth (Wealth of Nations), Smith pointed out that the basis of international trade lies in the existence of absolute differences in the productivity of labor and the cost of production between countries' commodities, and that such differences are due to natural endowments and acquired production conditions.

Adam Smith argued that in the international division of labor, there are absolute differences in labor productivity and cost of production. Smith believed that in the international division of labor, each country should specialize in the production of products in which it has an absolute advantage and exchange some of them for products in which it has an absolute disadvantage, which will make the most efficient use of the resources of each country, better promote the division of labor and exchange, and maximize the benefits of each country.

(4) Comparative Advantage Theory

In view of the limitations of the Absolute Advantage Theory, David Ricardo (1977-1989), who was the founder of the Comparative Advantage Theory, said that the theory of comparative advantage was not the only one. In view of the limitations of the theory of absolute advantage, David Ricardo inherited and developed Smith's theory in Political Economy and the Principles of Taxation.

Ricardo argued that the basis for the division of labor in international trade is not limited to absolute cost differences, and that even if a country has an overall advantage or disadvantage in labor productivity in the production of all products, as long as there is a difference in the extent of the advantage or disadvantage, the country can participate in international trade through the production of products that have a smaller difference in labor productivity, and thus obtain comparative advantage.

The theory of comparative advantage follows the principle of? The theory of comparative advantage is based on the principle of "taking the best of both worlds and the worst of both worlds". The theory of comparative advantage follows the principle of "the better of the two, the lesser of the two", and argues that the relative differences in technological levels between countries generate differences in comparative costs, which constitute the causes of international trade and determine the pattern of international trade.

(V) Protection of trade theory

In 1841, the German economist Friedrich Lister (Friedrich Lichtenstein), who was a member of the European Union and a member of the European Economic Area (EEA), proposed a new theory of protection of trade. Friedrich List, a German economist, put forward the theory of trade protection policy based on statism in The National System of Political Economy, pointing out that the protection system should be compatible with the degree of development of national industry, also known as the theory of protection of infant industry.

Unlike mercantilism, he combined trade and national economic development from the perspective of protecting productive forces, and formed a theory of trade protection based on statism, which was more objective and practical in the implementation of trade protection policies.

(VI) Mutual Demand Theory

Ricardo's theory of comparative advantage only demonstrated the basis and benefits of mutually beneficial trade based on the premise of specialization of production in each country, but it did not explain how the total benefits of trade were distributed between the two sides.

John Stuart Muller's theory of comparative advantage is a good example of how the benefits of trade are distributed between the parties.

The theory of mutual demand is essentially the theory that the value of goods is determined by supply and demand, and is a refinement and supplement to the theory of comparative advantage.

The theory uses the upper and lower bounds of the ratio of goods exchanged between the two countries to explain the scope of benefits to both sides; the terms of trade to explain the proportion of benefits to be distributed to each side; and the strength of mutual demand to explain the changes in the terms of trade.

The main features of international trade

International trade in goods belongs to the scope of commodity exchanges, and domestic trade is not different in nature, but because it is carried out in different countries or regions, so compared with the domestic trade has the following characteristics:

1, the international trade in goods involves the policy measures and legal systems of different countries or regions may exist.

2, international trade in goods, the number and amount of transactions are generally larger, the transportation distance is farther, longer fulfillment time, so the risk borne by both sides of the transaction is far greater than the domestic trade.

3, international trade in goods is easily affected by the political and economic changes in the countries of the two sides of the transaction, bilateral relations and changes in the international situation and other conditions.