This book is concerned with dynamic relations between international division of labor, division of consumption and determination of prices structure within a perfectly competitive framework in global economy. Our analytical framework examines the issues related to trade which are raised in the traditional trade theories. It also provides insights into the issues related to interdependence between knowledge creation and utilization and international trade examined by the new trade theory. The comparative advantage of our theory is that in providing rich insights into the complex of international trade it only uses a few concepts and simplified functional forms and accepts few assumptions about behavior of consumers, producers and institutional structures.