Theories of Interregional Trade and Theories of Value

Abstract

In this paper the Heckscher-Ohlin-Samuelson trade theory, Emmanuel's theory of unequal exchange, and a trade theory based upon the work of Piero Sraffa are examined within the context of interregional trade. It is argued that a suitable criterion for judging between these three trade theories is their underlying value theory. After examining each of the three trade theories with respect to the various debates surrounding their value theories, it is concluded that a Sraffan trade theory appears to have, of the three, the most logically sound foundation. As a consequence, an explicitly spatial Sraffan interregional trade theory is constructed.