In This Review

Strategic Trade Policy and the New International Economics
Strategic Trade Policy and the New International Economics
Edited by Paul R. Krugman
MIT Press, 1986, 313 pp
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The dozen papers here concern "new thinking about trade policy," much of it forced on economists by attacks on traditional trade theory as being unrealistic. A good bit of the discussion deals with rather belated efforts to take account of imperfect competition, the benefits of some activities that spill over into the rest of an economy, and government measures intended to provide economic benefits to one country at the expense of another. Divergent views plus some good analysis in clarifying issues (not least by Professor Krugman) make this a valuable book. What emerges clearly is how difficult it is to find a substitute for the old simplicities once one takes account of differences among industries and markets.