ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Trade Theory Status Quo Despite Krugman

Paul Krugman's contribution in the development of "new" trade theory pushed the profession beyond the overly simplistic assumption of perfect competition. Since then, new trade theory has tended to be integrated and reconciled with traditional trade theory, undermining its deployment in support of successful strategic trade policy intervention.

Trade Liberalisation for Development? Who Gains? Who Loses?

A number of models - developed in particular in the World Bank - show large gains for developing countries through trade liberalisation at the World Trade Organisation. These models are, however, not just simplistic, they also suffer from a number of fundamental flaws. The actual gains are far smaller for developing countries and far greater for the rich countries. The models ignore the risks of displacement, economic downturns and rising debt.
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