What is at Stake in Trade Theories?

Course Outline

International Trade

Course (61 videos)

What is at Stake in Trade Theories?

What are the economic, political, and philosophical issues at stake when we examine competing theories of international trade? This video takes a look at how one's worldview may differ depending on whether they follow factor endowment theories of trade or increasing returns to scale. When it comes to factor endowments, one may look at the resources a country brings to the table, the supply of labor as well as the incentives to work, and the natural resources available within a country. One would believe in stability in the economic prospects of countries, mean-reversion, and the ability for a country to "catch-up" to other countries by engaging in economic growth and investing capital productively. For increasing returns to scale, one may be interested in the source of increasing returns, which very often is knowledge, and may be more interested in the economics of innovation and science. One may believe more in the ability of small causes to have very big effects on a country's economy and there may be more focus on how policy can affect trade.

Teacher Resources


Verified Available Languages

Thanks to our awesome community of subtitle contributors, individual videos in this course might have additional languages. More info below on how to see which languages are available (and how to contribute more!).

How to turn on captions and select a language:

  1. Click the settings icon (⚙) at the bottom of the video screen.
  2. Click Subtitles/CC.
  3. Select a language.


Contribute Translations!

Join the team and help us provide world-class economics education to everyone, everywhere for free! You can also reach out to us at [email protected] for more info.

Submit subtitles




We aim to make our content accessible to users around the world with varying needs and circumstances.

Currently we provide:

Are we missing something? Please let us know at [email protected]


Creative Commons

Creative Commons License

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
The third party material as seen in this video is subject to third party copyright and is used here pursuant
to the fair use doctrine as stipulated in Section 107 of the Copyright Act. We grant no rights and make no
warranties with regard to the third party material depicted in the video and your use of this video may
require additional clearances and licenses. We advise consulting with clearance counsel before relying
on the fair use doctrine.