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By John Black, Alasdair I. MacBean (eds.)

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Additional info for Causes of Changes in the Structure of International Trade, 1960–85

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It distinguishes three markets (industrial, 29 L. 2 -3 2 3},2 Note: Manufacturing: SITC (R) 5-8 less 68 Source: GATT (1986) 'International Trade in 1985 and Current Prospects' (mimeo GATT, Geneva); GATT, International Trade, various issues (Geneva). developing less OPEC, and OPEC countries according to UN classifications), and two suppliers (industrial, and developing countries including OPEC). It reports each flow expressed as a share of total world trade, excluding the Centrally Planned Economies (CPEs).

This chapter focuses on economists' understanding of the basic determinants of trade patterns and, in particular, the manner in which these underlying factors change over time and are affected by various policy measures. A brief survey will be presented covering what economists have said about the determinants of the commodity composition of trade and how well their theories have been supported by empirical evidence. Fortunately, Ronald Findlay (1984) has written an excellent comprehensive survey of growth and development in trade models which carefully compares the diverse analyses dealing with structural change and international trade.

Whereas originally knowledge mattered, now the critical factor is physical equipment, human capital having led countries off in other directions. This shift could again reflect the role of MNCs, and the rapid accumulation of capital in the NICs where it can substitute for human capital. · Net trade in machinery shows a similar set of determinants to capital-intensive goods. It also exhibits a surprising link with coal in 1958 - a phenomenon Leamer explains by reference to the high transport component in the delivered cost of coal.

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