The main purpose of this book is to expose economics graduate students
and researchers to the most significant development in international
trade that has taken place in the recent past. Service transactions now
make up a sizeable portion of global trade. Trade in both final and
intermediate inputs is done virtually through information and
communication networks, raising afresh the question of the basis of
trade and calling for in-depth investigation. This book succinctly comes
up with a relatively new explanation for the basis of trade, thus it
adds a new dimension to three existing building blocks: technology,
endowment, and returns to scale.
Against a backdrop of standard Ricardian and Heckscher-Ohlin competitive
models of trade, the chapters of this book nicely introduce the issue of
communication cost and the difference in time zones between two trading
nations. Then follow many intricate phenomena such as informality, skill
formation, growth, wage inequality, and decisions regarding foreign
direct investment (FDI). However, imperfectly competitive models are not
dealt with in great detail as they deserve more space than can be
allotted to them here. Given the nonexistence of any research-oriented
in-depth analyses of competitive trade models with time-zone
differences, this book is a valuable addition to the resources available
to researchers and policymakers interested in deciphering recent
developments in global trade patterns and the subsequent welfare effect.
