Explaining the structure of foreign trade: Where do we stand?

During the last two decades, new research has greatly advanced our understanding of the structure of world trade. This article reviews the empirical literature that grew out of this effort and the theoretical developments that have been relevant for the empirical studies. But despite this research effort, explanations of foreign trade are still incomplete. We need a more technologically oriented trade theory and more emphasis on dynamics in order to understand the developments in international trade.