A Theory of International Trade Under Uncertainty - 1st Edition - ISBN: 9780123396501, 9781483271514

A Theory of International Trade Under Uncertainty

1st Edition

Authors: Elhanan Helpman Assaf Razin
Editors: Karl Shell
eBook ISBN: 9781483271514
Imprint: Academic Press
Published Date: 28th January 1979
Page Count: 202
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A Theory of International Trade Under Uncertainty analyzes international trade in goods and securities in the presence of uncertainty using an integrated general equilibrium framework that recognizes the dependence of markets for goods on financial markets and vice versa. The usefulness of this approach is demonstrated by means of applications to questions such as the effects of international trade on resource allocation, tariff policy, and intervention in financial capital markets. Results which are important for theoretical as well as policy oriented applications are presented.

Comprised of 11 chapters, this volume begins with an introduction to some of the fundamental elements of the deterministic Ricardian and Heckscher-Ohlin theories of international trade. Relevant elements from the theory of decision making under uncertainty are then discussed, along with the behavior of firms and consumers-investors in an economy with stock markets. Subsequent chapters focus on problems of commercial policy; gains from trade in goods and securities; and issues of intervention in financial capital markets. The book concludes by describing a dynamic model of international trade that contains an infinite horizon and takes into account the trade-off between present period consumption and savings. An example that illustrates an equilibrium structure of the dynamic model is presented.

This monograph is intended for economists who are interested in international trade or international finance, including graduate students who specialize in these fields.

Table of Contents


Chapter 1 Introduction


Chapter 2 Elements of the Deterministic Theory of International Trade

2.1 The Ricardian Theory

2.2 The Heckscher-Ohlin Theory


Chapter 3 Elements of the Theory of Economic Decision Making Under Uncertainty

3.1 Expected Utility, Risk Aversion, and Portfolio Choice

3.2 Increasing Risk

3.3 Markets for Risk Sharing

3.4 Individual Decision Making Under Uncertainty: An Application


Chapter 4 A Critical Survey of the Literature

4.1 The General Framework

4.2 Ex-Ante Trading Decisions

4.3 Ex-Post Commodity Trading Decisions

4.4 Financial Markets


Chapter 5 A Stock Market Economy

5.1 The Framework

5.2 Firms

5.3 Consumers

5.4 An Alternative Specification

5.5 Equilibrium


Chapter 6 A Diagrammatic Exposition of Stock Market Equilibrium and the Balance of Payments

6.1 The Basic Problems

6.2 No International Trade in Securities

6.3 International Trade in Securities

6.4 Stock Market Equilibrium with a Safe Bond


Chapter 7 The Basic Propositions of the Pure Theory of International Trade Revised

7.1 Comparative Costs Theory

7.2 Factor-Price Equalization

7.3 The Stolper-Samuelson Theorem

7.4 The Rybczynski Theorem

7.5 The Heckscher-Ohlin Theorem


Chapter 8 Commercial Policy

8.1 The Deterministic Model

8.2 Protection Under Uncertainty

8.3 Welfare Losses from Tariffs


Chapter 9 Gains from Trade



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© Academic Press 1978
Academic Press
eBook ISBN:

About the Author

Elhanan Helpman

Affiliations and Expertise

Galen L. Stone Professor of International Trade, Harvard University, Cambridge MA, USA

Assaf Razin

About the Editor

Karl Shell

Affiliations and Expertise

Cornell University

Ratings and Reviews