Question 1: “New Trade theories offer a better explanation of today’s pattern of international trade than Traditional (comparative advantage) trade theories. Contrast the different implications of these two theories for the distribution of income, both within and between countries. Discuss.
Question 2: “The behavior of short-term portfolio flows is entirely independent of domestic economic conditions in developing countries. Developing countries should thus put strong restrictions on these capital flows. Short-term capital flows bring no benefits to developing countries”. Discuss.
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