On the Smithian Origins of "New" Trade and Growth Theories

Univ. of Illinois-Urbana-Champaign Commerce & Business Admin. Working Paper No. 02-0100

17 Pages Posted: 13 Feb 2002

Date Written: January 29, 2002

Abstract

Adam Smith (1776) is generally ignored as an international trade theorist in textbooks and surveys because of the common belief that he only confirmed the rule of absolute advantages to explain structure of foreign trade. On the other hand, many textbooks and surveys on growth theories simply overlook Smith's significant contributions to economic growth theory. However, his vent-for-surplus approach may be interpreted as a pioneering study which stresses the importance of economies-of-scale in explaining the structure of foreign trade. Furthermore, in Smith (1776), both learning by doing and economies-of-scale are crucial to explain long-run economic growth. This short paper addresses to the undeniable influence of Smith's concepts such as "extent of the market", "division of labor", "improved dexterity in every particular workman" and "simple inventions coming from workman" on both recent trade and growth models. The note mainly is based on a schematic outline of Smith's ideas on the nature and causes of the wealth of nations.

Keywords: History of economic thought, Adam Smith, international trade theory, vent-for-surplus approach, economies-of-scale, learning by doing, externalities, endogenous growth

JEL Classification: A11, B12, B22, F12, O30, O40

Suggested Citation

Kibritçioğlu, Aykut, On the Smithian Origins of "New" Trade and Growth Theories (January 29, 2002). Univ. of Illinois-Urbana-Champaign Commerce & Business Admin. Working Paper No. 02-0100, Available at SSRN: https://ssrn.com/abstract=300599 or http://dx.doi.org/10.2139/ssrn.300599

Aykut Kibritçioğlu (Contact Author)

Ankara University ( email )

AUSBF Iktisat Bolumu, Cebeci
Ankara, 06590
Turkey
+90-312-5951274 (Phone)
+90-312-3197736 (Fax)

HOME PAGE: http://kibritcioglu.com/iktisat/

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