ABSTRACT
Essentially international trade is only a special form of interregional trade. We know a great deal about it because the movement of goods over the frontier was always recorded by every nation for revenue purposes, though not always very accurately. It was the subject of different and varying degrees of national regulation and national budgets and taxation could alter the relative prices of goods on different sides of the frontier, but essentially the same factors were at work as between different regions of the same country. Areas specialised: some grew faster than others. The lagging regions would find their industries tending to wither under competition and might experience what were really balance of payments problems as money flowed out of the area: on the other hand, the rise of incomes in the more competitive parts of a country tended to increase demand for imports from other areas. The main differences between internal and external trade lay in the greater ability and willingness of governments to control trade with outside countries and in the ability to vary exchange rates with the outside world.
