Trade Dynamics : The Impact of Innovations and Population Changes (A General Theory of Trade Dynamics with Linear Production, Part 2 of Two Parts)

We demonstrate that innovations in import and pivot goods usually cause the innovator’s trading partner to benefit and that few exceptions occur, and those mostly when the innovator has the larger economy or the higher per capita income. If the productivities of all goods in one country increase uniformly or its population increases, the trading partner’s income will increase along an ascending staircase. These remarkable findings are far different from those of John Hicks, Paul Samuelson, Paul Krugman, and others because their findings are all special cases of our work and not generally true.Part 1: Analytical Foundations of Trade Dynamics and Irrational Expectations in Trade-and-Spending-Allocation Dynamics (A General Theory of Trade Dynamics with Linear Production, Part 1 of Two Parts)