Interregional Trade Models

Interregional trade has been relatively neglected by most trade analysts. A dearth of data has limited formal explorations of interregional trade but the magnitudes of the volumes revealed suggest that greater attention should be directed to this form of connectivity between economies. This chapter begins with a review of the theory and practice of international trade theory and its link to some of the ideas that form the basis of the New Economic Geography. Some alternative approaches to the measurement of trade are examined, especially the role of intra-industry as opposed to interindustry trade, vertical specialization, trade overlap, and spatial production cycles. Thereafter, attention is addressed to the interregional impacts of international trade.