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international trade theory (F1)<br />A succession of attempts to explain why nations trade particular goods with each other. The best-known early theories are of ABS OLUTE ADVANTAGE and COMPARATIVE ADVANTAGE; later theories include the HECKSCHER OHLIN factor endowment theory. Many of these theories assume that commodities are mobile but factors of production are not.<br /><em>Reference</em><br />Jones, R.W and Kenen, P.B. (1984) Handbook of International Economics, Vol 1, Amsterdam: North-Holland.
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