Economists have always viewed free international trade as a source of wealth and welfare gains. The voluntary exchange of commodities induces favorable patterns of specialization and, therefore, leads to an improvement in the international division of labor. Since each country is driven to utilize its comparative advantage and to produce what it can produce most efficiently, the global output is increased and gains from international trade accrue to all countries. This optimistic view of free international trade has been challenged both from inside the body of mainstream economic theory (e.g. the optimal-tariff and infant-industry arguments) and by outsiders like dependency theorists. It has survived these critiques, albeit with some qualifications. Knowing that there are some exceptions to the rule, most economists now accept the general validity of the free-international trade principle, at least as a good rule of thumb.
Consequences of international trade have incited a heated controversy among researchers. Some researchers debate the capacity of governments to govern in the globalized world. Others argue over the relationship between international trade and economic development. In this article, we attempt to examine changes in the structure of the international trade network. As discussed below, we believe that changes in network structure at least in part reflect the relationship between international trade and development. In the following section, we present some arguments as to how international trade is related to economic development. As Bruce E. Moon (2000) observed, the same reality -- resource flows between countries -- has been perceived in radically different ways and, as a result, completely different predictions have been made about the consequences of such relations. (Bruce E. Moon; 2000)
The international trade thesis is often associated with neoclassical economics, which... [continues]
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