some aspects of the pattern of trade are easy to understand. climate and resources clearly explain why brazil export coffee and saudi arabia exports oil. much of the pattern of trade is more subtle, however. why does japan export automobiles, while the united states exports aircraft? in the early nineteen century english economist david ricardo offered an explanation of trade in terms of international difference in labor productivity, an explanation that remains a powerful insight. in the twentieth century, however, alternative explanations have also been proposed. one of the most influential, but still controversial, links trade patterns to an interaction between the relative supplies of national resources such as capital, labor, and land on one side and the relative use of these factors in the production of different goods on the other. we present this theory in chapter 4. recent efforts to test the implications of this theory, more recently still, some international economists have proposed theories that suggest a substantial random component in the pattern of international trade, theories that are developed in chapter 6.