New trade theory (NTT) is a collection of economic models in international trade which focuses on the role of increasing returns to scale and network effects, which were developed in the late 1970s and early 1980s.
New trade theorists relaxed the assumption of constant returns to scale, and some argue that using protectionist measures to build up a huge industrial base in certain industries will then allow those sectors to dominate the world market.
Less quantitative forms of a similar "infant industry" argument against totally free trade have been advanced by trade theorists since at least 1848 (see: History of free trade).
Read more about New Trade Theory: The Theory's Impact, Econometric Testing, History of The Theory's Development
Famous quotes containing the words trade and/or theory:
“I doubt if men ever made a trade of heroism. In the days of Achilles, even, they delighted in big barns, and perchance in pressed hay, and he who possessed the most valuable team was the best fellow.”
—Henry David Thoreau (18171862)
“OsteopathOne who argues that all human ills are caused by the pressure of hard bone upon soft tissue. The proof of his theory is to be found in the heads of those who believe it.”
—H.L. (Henry Lewis)