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On the Contemporary Commodity Structure of World Trade Patterns: An Empirical Assessment
Author(s) -
Mena Hugo
Publication year - 1997
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.00028
Subject(s) - economics , commodity , consumables , capital good , production (economics) , consumption (sociology) , international trade , capital (architecture) , trade theory , world trade , international economics , microeconomics , trade barrier , economy , goods and services , business , market economy , social science , archaeology , marketing , sociology , history
For about 150 years, international trade theory has mostly highlighted trade in consumption goods. Such a modeling approach was likely supported by the then prevailing commodity structure of world trade. This paper shows that – at least since 1970 – only about 20 per cent of commodity trade has taken place in consumables, the remainder being intermediates and capital goods. Theoretically, this evidence suggests a move in the modelling strategy for traded goods: from utility functions to production functions. Sanyal and Jones' “new trade theory” (1982) does precisely that. In addition, some crucial research challenges emerge. These relate to dynamic changes in some general characteristics of production technologies throughout the world.