Causes of Change in Manufactured Exports

In recent years there has been a coherent attempt to come to terms with the deficiencies in the traditional Heckscher—Ohlin approach to the determination of trade patterns. Kierzkowski (1984) provides a helpful bringing together of many of the individual contributions where the major feature is the introduction of a monopolistically competitive rather than a perfectly competitive world. Helpman and Krugman’s (1985) book helps to set out many of these ideas in a coherent framework. Nevertheless, existing theoretical explanations of trade patterns among developed countries still seem to fall rather a long way short of the actual patterns observed. It is not totally clear from basic factor endowments why trade has developed its current pattern even when appropriate adjustment is made for the major array of distortions that have occurred.