Theory of International Trade

BRANKO HORVAT is a Director of the Institute for Advanced Studies, Zagreb. He was born in Petrinja, Croatia. As a boy he participated in partisan guerrilla against fascist invaders. He was educated in economics, philosophy and sociology at Zagreb University, London School of Economics and Manchester University where he took his doctorate. He has since held positions at Massachusetts Institute of Technology, Harvard University, Manchester University and the Ford Foundation. He has been Chief Methodologist at the Federal Planning Bureau and a Member of the Federal Economic Council. He was Founder and Director of the Institute of Economic Sciences and Founding editor of Economic Analysis. He was also Founding President of the International Association for the Economics of Participation. He has been Adviser to several governments, and guest Professor to a dozen universities, including Cambridge, Paris, Michigan University, Yale and Berkeley. His work has been translated into fifteen languages.

• Figures Preface Symbols Abbreviations Introduction PART I: THE MAINSTREAM INTERNATIONAL TRADE THEORY The Evolution of International Trade Theory The Heckscher-Ohlin Theory Critique PART II: THE SYSTEMIC THEORY OF VALUE Diachronic vs. Synchronic Labour Input: The Two-Century Old Misunderstanding The Employment Effect The Replacement Effect The Interplay of Employment and Replacement Effects The Traverse PART III: THE BASIC THREE-INDUSTRY MODEL Stationary Economy The Wage-Rental Curve PART IV: AN ALTERNATIVE THEORY Three Models Intraindustry Trade Four Hypotheses PART V: THE GAINS FROM TRADE The Pattern of Specialization The Gains from Trade Unequal Exchange PART VI: TARIFFS Tariffs and Subsidies Customs Union References Index