As trade liberalization and the fragmentation of production processes promote greater international exchange of inputs, economists must adjust their thinking on trade issues. Transport costs have plummeted, and the difficulties of communicating between locales half a world apart have practically vanished. In this book Ronald Jones suggests how the basic core of real trade theory can be modified to take into account the increased international mobility of inputs and productive factors. He emphasizes the role of country "hinterlands" and how it is related to agglomeration effects in determining the location of economic activity. After discussing the positive aspects of enhanced mobility for output patterns and market prices, Jones evaluates the significance of globalization for governmental trade policies and public attitudes about regional alliances.
"Ronald Jones is unequaled in his clear analysis and elegant presentation of seemingly complex theories of international trade and commercial policy. In this book he brings his skills to bear on an important topical issue—cross-border trade in factors of production and in intermediate goods—and in the process brings together much of his research on it. This book will delight his numerous fans and earn him a whole generation of new ones."
—Avinash Dixit, Sherrerd University Professor of Economics, Princeton University
"Ronald Jones has been the leading theorist of international trade throughout his career. This addition to the MIT Press series of volumes on the Ohlin Lectures extends a lifetime of accomplishment to this field by looking at globalization as an integration of 'fragmented' production processes made possible by the new information technology. The result is to enrich and extend the insights of Ricardo and Ohlin to the cutting edge of contemporary concerns."
—Ronald Findlay, Ragnar Nurkse Professor of Economics, Columbia University
"This book shows, once again, why Ronald W. Jones has been a towering figure in international trade for four decades. With his trademark skills and elegance, he offers a comprehensive and insightful analysis of globalization."
—Henryk Kierzkowski, Professor of Economics, Graduate Institute of International Studies, Geneva, Switzerland
"Ronald Jones takes us on a grand tour of the fundamental forces governing international trade in today's world—factor movements, multi-national production, trade in inputs, and governmental policies aimed at preserving nationality. The reader could not ask for a better tour guide than the grand maestro of real trade theory!"
—Roy Ruffin, M.D. Anderson Professor of Economics, University of Houston