1. Chapter Five Beyond Comparative Advantage: Empirical Evidence and New Trade Theories Copyright © 2006 South-Western/Thomson Learning

2. 2 Table 1: The Leontief Paradox

3. 3 Table 2: Leamer’s Reformulation of Leontief Test, Corrected For Unbalanced U.S. Trade

4. 4 Table 3: Intra-Industry Trade Indexes, 1985

5. 5 Figure 1: Location Can Cause Intra-Industry Trade in Homogeneous Goods

6. 6 Table 4: Ratio of Merchandise Trade to Merchandise Value-Added, 1980, 1990, 2000 (Percent)

7. 7 Figure 2: Internal and External Scale Economics

8. 8 Figure 3: Mutually Beneficial Trade Based Solely on Scale Economies

9. 9 Figure 4: Internal Scale Economies as a Basis for Trade Between Identical Countries

10. 10 Figure 4a: Internal Scale Economies as a Basis for Trade Between Identical Countries

11. 11 Figure 4b: Internal Scale Economies as a Basis for Trade Between Identical Countries

12. 12 Figure 4c: Internal Scale Economies as a Basis for Trade Between Identical Countries

13. 13 Figure 4d: Internal Scale Economies as a Basis for Trade Between Identical Countries

14. 14 Figure 5: External Scale Economies and Comparative Advantage

15. 15 Figure 6: Interaction of External Scale Economies and Comparative Advantage

16. 16 Figure 7: Dynamic External Economies and the Learning Curve

17. 17 Figure 8: Similar Tastes and Trade: The Overlapping-Demand Hypothesis

18. 18 Figure 9: Direction of Merchandise Exports, 2001

19. 19 Figure 10: Transportation Costs and the International Market for Good X

20. 20 Figure 11: Elasticities of Scale by Industry

21. 21 Figure 12: Asia-U.S. Trade Routes