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Among the western scholars, few of them have taken the research on international trade and economic growth as an independent subject. Most theories on international trade and economic growth are occasionally reflected in their economic thought. The ages as well as the schools that the different economics belong to, together with the interest groups they represent bring a great influence to their views and analysis method on international trade and economic growth. The views on international trade and economic growth held by the western scholars can be roughly divided into four types:

Free trade promotes economic growth; trade protection improves economic growth; free trade, moderate trade and economic growth; trade pessimism. The analysis method develops from the classical single element analysis to neo-classical multi-element analysis, marginal analysis, modern econometric model and mathematical analysis.

I Free trade drives economic growth

3. Adam Smith’s thoughts on international trade and economic growth

Adam. Smith was the founder of British classical economics. He believed international trade had a great significance on economic growth. Firstly, Smith held that labor division was able to improve labor productivity. The depth of labor division in one country was limited by the market side of the country while foreign trade could breakthrough the constraint of the domestic market to expand the market scale for further development in labor division. Specialized labor division in different countries and regions could promote the improvement of the labor productivity in various countries by means of international trade and as a result, conductive to economic growth. Secondly, foreign trade enables surplus product of one country to realize its value, which therefore, encourages people to improve labor productivity, spares no effort to enhance its yield for the increase of both national wealth and income. He said, “between any places where the foreign trade is conducted, it is self-evident that two different kinds of interests can be achieved from this, that is, to output the reminder of land and annual labor products that they do not need while to exchange for other goods that they need. Exchanging the surplus products to other goods will satisfy part of their needs and in addition to increase their enjoyment. This trade type adds value to the surplus products.” Thirdly, high interests made by some businessmen from foreign trade could improve the general profit rate of its country, and the reason relies on that the capital of other production units would be transferred to the said foreign trade, reducing commodity supply of this unit. When the demand is stable and the price is increased, capitalists in these units, like foreign trade businessmen, could gain more profits. At last, foreign trade could not only promote production but also enhance the interests of the customers, which in addition, favorable to the increase and development of national economy.

Smith insisted on free trade in trade policies and he refuted various measures of mercantilism which is limiting the trade in An Inquiry into the Nature and Causes of the Wealth of Nations item by item. He pointed out its various disadvantages which were unfavorable to the increase and development of national economy. In the meantime, he represented absolute advantage principle of the international labor divisio本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。