Elhanan Helpman Economic Theory

Elhanan·Helpman research the trade from the perspective of economies of scale between similar countries. And that is the cause of product specialization and international trade. When the two countries become more similar, the market structure change into incompletely competition from perfect competition and the returns to scale show an increasing trend. Economies of scale will replace the factor endowment theory and explain the international trade more fully. On the base of quality ladder model,Helpman also studied technological innovation.he proved, the higher the stock of knowledge,the faster innovation and economic grow.meanwhile human capital is rather importmant in innovation and it has a positive correlation with education,the accumulation of human capital will bring faster long-term growth. A larger country that has a small amount of human capital, howerer, will develop slower than a small country that is of abundant human capital.Helpman also researched how the interest group impacted the foreign trade. He thought the interest group and political parties would achieve this balance:none of interest group would like to increase any political contributions for any more benefits and parties would not make any change in policies for any more political contributions. Both of them achieve Pareto optimality finally.To the above-mentioned theories, this paper will take a systematic review. Combing with the development mode of China's reform and opening, we try to find the inspiration that helpman theories bring from economies of scale, market, human capital accumulation and product quality respectively.