ABSTRACT
In the early 1930s, Leontief and Lerner provided a geometric technique for obtaining a country's offer curve from its social indifference curves and production-possibilities frontier. This chapter discusses James E. Meade's ingenious geometric technique. The main tool of Meade's analysis is the concept of the trade indifference map. The social indifference curve shows the alternative combinations of consumption levels of X and Y which yield the same level of social welfare. The trade indifference map can be used for the purpose of deriving the offer curve. International equilibrium can then be shown in terms of the two offer curves by superimposing one diagram on the other, after one country's diagram has been rotated 180° to match the axes of the other. The chapter focuses on to the properties of international equilibrium, in particular, whether or not it is stable and unique. It deals with the problem of stability of international equilibrium.
