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).
Famous quotes containing the words trade and/or theory:
“Until the end of the Middle Ages, and in many cases afterwards too, in order to obtain initiation in a trade of any sort whateverwhether that of courtier, soldier, administrator, merchant or workmana boy did not amass the knowledge necessary to ply that trade before entering it, but threw himself into it; he then acquired the necessary knowledge.”
—Philippe Ariés (20th century)
“Many people have an oversimplified picture of bonding that could be called the epoxy theory of relationships...if you dont get properly glued to your babies at exactly the right time, which only occurs very soon after birth, then you will have missed your chance.”
—Pamela Patrick Novotny (20th century)