Date of Award
Doctor of Philosophy
It has been agreed that the emphasis on the role of increasing returns to scale (IRS) in international trade theory allows a straightforward explanation of empirical phenomena that the traditional frameworks cannot satisfactorily explain. The aim of this thesis is to prove further developments of international trade theory in the presence of IRS.;The thesis consists of four essays. The first essay analyzes the effects of a tariff and a restricted inflow of foreign capital on a small open economy (SOE) in the presence of IRS. It is shown that the presence of IRS significantly affects the results found in the Heckscher-Ohlin-Samuelson (HOS) framework. In particular, a capital inflow can improve economic welfare with IRS.;The second essay constructs a simple model to analyze trade patterns and gains from trade with an intermediate good produced under IRS. Free trade does not neccessarily lead to gain for the economy and either specialization or multiple equilibria are obtained. Multiple equilibria, two economic systems (average cost pricing and monopoly), and two stages of free trade (free trade in final goods and free trade in both the intermediate good and final goods) provide interesting policy implications.;In the third essay, a two-final-good and knowledge-based growth model is built to study patterns of economic growth in a SOE. The source of economic growth is the introduction of new intermediate goods as a result of R&D, which in turn generates dynamic IRS in both the production of one final good and R&D. The results obtained in the model are consistent with intercountry differences in growth patterns.;The fourth essay presents a simple dynamic model consistent with observed changes in both industrial structure and trade patterns in the process of economic growth. Learning by doing in the producer service sector is the source of endogenous economic growth. It is shown that economic growth is accompanied by changes in industrial structure and comparative advantage, while changes in industrial composition of the manufacturing sector accelerate economic growth.
Ishikawa, Jota, "Essays On International Trade Theory In The Presence Of Increasing Returns" (1990). Digitized Theses. 1965.