What is called the pure theory of international trade?

<>1. Mercantilism: The only form of wealth is gold and silver, and the amount of gold and silver is the only measure of a country's wealth, and the main channel for obtaining gold and silver is the international market. By limiting the amount of money in prizes and limiting the amount of money to achieve a surplus, so that gold and silver can flow in, the country will be rich.

2. Theory of absolute superiority: Adam Smith believed that in the international division of labor, each country should specialize in producing its own products with absolute superiority, and exchange a part of them for products with absolute disadvantage, so that the resources of each country can be used most efficiently, and the division of labor and exchange will be better promoted, so that each country can obtain the greatest benefits.

3. Theory of comparative advantage: following the principle of taking the importance of the two advantages and the lesser of the two inferior, it is believed that the relative difference in the technical level between countries produces the difference in comparative costs, which constitutes the cause of the international model and determines the international model.

4. Protection theory: From the height of protecting productive forces, the protection of the national economy is combined with the national economic development to form a protection theory based on nationalism, and it is more objective and practical in the implementation of the protection policy.

5. Mutual demand theory: The theory of mutual demand essentially refers to the theory that the value of commodities is determined by supply and demand, which is a perfect and supplementary to the theory of comparative advantage.

Comparison of Theory and Traditional Theory: Mainstream International Theory: International Theory began as a specialized branch of theory with Adam Smith.

Since the 80s, many Western economists have devoted themselves to using the theory of industrial organization and the theory of market structure to explain the international phenomenon, and to construct new theoretical models with concepts and ideas such as imperfect competition, increasing returns to scale and different products. A group of economists, represented by Stigley, Krugman, Grossman, and Helpman, created a new framework for analysis.

The biggest feature of the traditional international theory is that the logic is rigorous and the form is perfect. But that's where its weakness lies. Because the real world is not as perfect as it thinks.

In fact, the traditional international theory has been severely challenged since its birth. The mystery of Leontief, first of all, through empirical research, raises questions about its international commodity and factor patterns.

After the war, especially after the 60s, many new phenomena appeared in the international field. ** between developed countries (i.e., between countries with similar factor endowments) and between similar products (i.e., between products with a similar proportion of factors required for production)**, etc. The traditional international theory is at a loss for this.

The biggest difference between the two lies in the difference in theoretical assumptions, the classical theory is based on the assumption of constant reward of scale and perfect competition, but now the theory is based on the assumption of increasing scale and imperfect competition, it can be said that the modern theory isTheory of Comparative AdvantageThe dynamic development is closer to the reality of modern international development.

Traditional international theories mainly include: Adam Smith.

David Ricardo's theory of comparative advantage and Heckscher-Ohlin's theory of factor endowment.

These theories are based on a number of rigorous theoretical assumptions, including: perfect competition in the market, constant returns to scale, similar and constant demand preferences across countries, and model analysis.

It's two countries, two commodities, two elements.

The theory of absolute advantage refers to the absolute difference in the labor cost of producing a certain product between two countries, and the labor cost consumed by one country is definitely lower than that of the other. Therefore, the division of labor between the two countries, each country doing what it does best, producing its own advantageous products, and then exchanging them, can increase the social labor productivity of the two countries and profit from the exchange.

The emergence of modern theories is mainly due to the fact that traditional theories have many assumptions, resulting in many real-world phenomena that cannot be explained. The famous "Lyontief's riddle" caused a huge sensation and unprecedented discussion because it could not be explained by the factor endowment theory. The development of any theory is the result of constantly revising previous theories and gradually loosening various assumptions.

The modification and extension of the assumptions of the modern theory to the traditional theory mainly include: imperfect competition in the market, increasing returns to scale, increasing the number of products, factors and countries, and increasing the research on the impact of scientific and technological access and progress on the world.

The traditional ** model focuses on the supply side and ignores the demand side, and Linde's preference similarity theory is the first to find the cause of ** from the demand side. He argues that the demand for products in countries depends mainly on the income level, and that the demand for products in two countries with similar income levels may be more similar.

Businesses will first meet domestic demand, and the remaining products will be exported to countries with similar needs. This explains what the H-O model doesn't explain: why countries with similar factor endowments still do it**.

Modern theories (imperfect competition and economies of scale, product life cycle theories) and traditional theories (classical and neoclassical) are actually in the same vein, and the essence is that they are both theories of comparative advantage.

Modern barter** compared to traditional barter**:

Modern barter is a new way developed based on traditional barter, in addition to retaining the concept of barter in traditional barter, it also has three main characteristics that distinguish it from traditional barter: transaction globalization. Modern Barter** relies on computer technology and network technology to establish a barter trading platform.

Breaking through the time and space limitations of traditional barter, the best channel is unimpeded day and night around the world. Multilateralization of transactions. Modern barter introduces electronic trading media, barter quota, and gives full play to its transaction function equivalent to currency, breaking the "point-to-point" simple transaction mode and realizing "point-to-point" and "many-to-many" multilateral transactions.

Diversification of trading products.

Modern barter** is traded with all walks of life, including not only tangible goods, but also intangible goods such as services, labor capacity, production capacity, rich sites, rich time and intangible assets. Traditional theories are divided into classical theories and neoclassical theoriesThe key assumptions of classical theories are:

Labor is the only factor input fixed marginal cost of products, perfectly competitive commodity and factor markets, fixed scale remuneration The key assumption of the neoclassical theory is that there are more than 2 factor inputs, the marginal cost of the product increases, and the market for perfectly competitive commodities and factors, and the key assumptions of the fixed scale remuneration contemporary theory are: product production has economies of scale; Imperfectly competitive commodity market.

The differences between traditional and new theories are as follows:

1. The new theory explains the industry, while the traditional theory explains the industry;

2. The assumption of the new theory is that there is no perfect competitive market, while the premise of the traditional theory is that the market is completely competitive;

3. The traditional theory is studied from the perspective of supply, and the new theory is also explained from the perspective of demand;

4. The new theory emphasizes the role of differentiated products in the international production, and the traditional theory assumes that all products are homogeneous;

5. The new theory introduces economies of scale, and the traditional theory assumes that the return to scale remains unchanged.

Since the emergence of the international policy, there has been a game of protection and freedom, although freedom is more conducive to economic development, but the final result of the game is still the universal implementation of protection policies in all countries. The biggest difference between the new theory and the traditional theory is that the theoretical assumptions are different, the traditional theory is based on the assumption of constant scale reward and perfect competition, but the new theory is based on the assumption of increasing scale and imperfect competition, it can be said that the new theory is a dynamic development of the theory of comparative advantage, which is closer to the reality of modern international competition.

The horizontal division of labor and rapid growth between the industry and developed countries have become the main phenomenon of today's international industry, and the new theory believes that this is because the motivation and basis of the international industry have changed, and it is no longer just because of the difference in technology and factor endowment. The new theory analyzes the motivation and basis of international technology from different perspectives such as supply, demand, and technology gap theory.

The traditional theory is based on the framework of a perfectly competitive market structure, and a perfectly competitive market is the most efficient market, and any intervention will only bring about a loss of efficiency. Therefore, traditional theories emphasize the importance of freedom. The theory of external economy holds that some high-tech industries with technological innovation can bring benefits to other sectors through knowledge spillover, that is, they can generate beneficial external economy.

** These industries should be supported to promote the economic development of the whole society.

The theoretical basis of the international ** is comparative advantage.

Corresponding to comparative advantage is absolute advantage. The concept of absolute superiority is not difficult to understand, for example, I am stronger than you in the field of tire manufacturing, and I am in absolute superiority in manufacturing technology. However, in the international world, it is not possible to determine the relations between countries on this basis.

For example, the rubber raw materials required for the tires I manufacture are subject to you, and the products exported from us to your side also have transportation and logistics customs clearance costs, as well as labor costs, and the cost of products in your territory plus all aspects will be higher than your domestic ****.

Therefore, the relationship between the two countries is based on comparative advantage rather than absolute advantage. The division of labor and cooperation is based on comparative advantage, not absolute advantage. You know, the time and energy of a place is limited.

You may be better at everything, but you can't do everything yourself. Of course, you can choose to do everything yourself, but then you will get less than you will get by working with me.

The concept of comparative advantage tells us that for a country or individual who is strong in all aspects, the smart thing to do is not to rely on strength, attack from all sides, and do everything in every way, but to spend limited time, energy, and resources where it does best. Conversely, a country or individual who is vulnerable in all respects does not have to feel sorry for itself and complain about its innate inadequacies. You know, the resources of the "strong" are also limited.

For its own benefit, the "strong" must set aside territory for the "weak".

In fact, China's Tian Ji.

Horse racing stories also reflect this principle of comparative advantage. The upper, middle, and lower batches of horses of the side represented by Tian Ji were inferior in quality to King Qi at each level.

of horses. However, Tian Ji used the dismount that had no advantage at all to the upper horse of the king of Qi who had a complete advantage, and then used the upper and middle horses with a relative comparative advantage to deal with the middle and lower horses of the king of Qi, and the result was a steady win.

The exchange of goods and services between countries, and the causes and consequences of international commodity exchange, as well as related policies.

It can be referred to and has a certain enlightening effect, but it cannot be directly appropriated without modification at all. The traditional theory is to focus on the goods; For nearly 20 years, the service **.

and investment** are growing rapidly. The traditional theoretical framework and analytical methods still have certain reference value, but they are not pertinent and rational.

What are the traditional international theories?

The traditional international theories are: absolute advantage theory, h-o-s model, relative advantage theory or comparative advantage theory.

1. Ricardo.

The doctrine of comparative advantage is that each country engages in specialized production that is conducive to improving the terms of exchange of commodities, and through international exchange, in order to improve the income and welfare of each country. The theory of comparative advantage mainly emphasizes that countries have different functional characteristics in terms of demand and supply. The division of labour between countries, i.e. specialized production, allows for the development of different technologies.

Thus even the same labor force, the production function of various countries.

It is also different, so that the economy is divided between countries, each with its own role.

2. The main conclusion of the h-o-s theory is that a certain country mainly exports the relatively abundant and cheap factors of production that it has.

The products produced are also imported from the relatively scarce local factors of production.

3. Heckscher's theory of Ohlin (H-O-S, ELI Heckscher-bertil ohin-Paul Semuelson) model is a two-country, two-commodity, and two-resource endowment.

model. Its main assumptions are the following:

1) The factors of production are homogeneous, or the technical level of production is the same, so the production function of the product is the same. 2) The remuneration for scale of production remains unchanged. 3) Conform to the assumptions of a perfectly competitive market model.

4) The factors of production are fully utilized. 5) The factors of production are different in each country, so the factor intensity of commodities is different, that is, generally speaking, labor-intensive and capital-intensive.

However, American economists.

As early as 1953, based on the statistics of the United States in 1947, Leoncheff found that the capital of imported products in the United States and the capital-labor ratio of exported products. That is to say, the United States as a developed country rich in capital.

Exporting labor-intensive products and importing capital-intensive products, which is inconsistent with the theory of H-O-S**, is known as the "Lyon-Cuff Mystery". Leoncheff's discovery completely overturned the empirical basis of the traditional international ** theory.