Intro -- Contents -- I. INTRODUCTION -- II. MEASURING THE COST OF LIVING -- III. TRUE REAL EFFECTIVE EXCHANGE RATES -- IV. AN APPLICATION: THE IRISH ECONOMY'S EXPOSURE TO STERLING -- V. CONCLUSION -- Appendix -- References.

The theory of international trade is one of the oldest subfields of economics. This chapter provides an overview of the present state of positive trade theory, concentrating on developments, at the same time it draws attention to the continuity in the development of the subject. It discusses the...