Trade Theory, Analytical Models and Development

Trade Theory, Analytical Models and Development

Essays in Honour of Peter Lloyd, Volume I

Edited by Sisira Jayasuriya

Trade Theory, Analytical Models and Development, comprises 11 essays offering new contributions on the following topics: trade and wages; factor endowments, factor mobility and political economy of trade; optimality of tariffs; measurement of welfare; customs union theory; endogenous mergers and tariffs; intra-industry trade; state trading enterprises and trade liberalisation; general equilibrium effects of e-Commerce, and trade; economic growth with production and consumption externalities; and environmental pollution and resource degradation.

Chapter 7: What have we learned from a generationÂês research on intra-industry trade?

David Greenaway and Chris Milner

Subjects: economics and finance, international economics

Extract

7. What have we learned from a generation’s research on intra-industry trade?* David Greenaway and Chris Milner 1. INTRODUCTION Peter Lloyd has enjoyed a long and distinguished career, during which he has made a great many contributions to the international economics literature. Moreover, his contributions have been to theory, empirical analysis and policy evaluation. In deciding upon an appropriate topic for a Festschrift in his honour, one is therefore potentially spoiled for choice. But for us, the choice was straightforward: intra-industry trade. We chose this for two reasons. First, despite the fact that in terms of number of publications, Peter’s contributions on this subject are relatively modest (four articles, three chapters, two edited volumes and one book),1 their impact and especially that of the book (Grubel and Lloyd, 1975) has been enormous. So much so in fact that intra-industry trade (IIT) would be the first topic that comes to mind for most of us when we think of Peter’s work. Grubel and Lloyd (1975) is his most widely cited work, not only because it develops the famous Grubel and Lloyd index, but also because it was the first systematic and comprehensive analysis of IIT and because it was the stimulus to a large number of young scholars to work in the area. That is the second reason why the topic is a natural for us, we were among those (then) young researchers who were stimulated by the book to develop a research agenda from it. Since the publication of...

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