Raw Materials - A natural of semifinished god that is used in manufacturing or processing to make some other good. Bauxite is the raw materials (ore) from which aluminum is made; aluminum is turn can be the raw material from which household utensils are manufactured.
áThere is another definitions from the subject area of raw materialsá distinct from the above mentioned:ááá
áRaw materials are products immediately extracted from nature which have undergone a first processing through which they have become marketable and, consequently, a tradable commodity. Raw materials include all energy raw materials (crude oil, natural gas, coal, uranium), metals, semi-metals and industrial minerals (kaolin, graphite, sulfur, salts, phosphates), rocks, water as well as all plant and animal products, whether they come from tropical regions (coffee, jute, tropical timber) or from temperate latitudes (wheat, meat, wool, etc.).
áRaw material economy: It comprises all activities which are part of the planned handling of raw materials, i.e. explanation, evaluation, extraction, conversion into a tradable product, trade and forecasting. "Planned" here means economically useful, ecologically and socially responsible activities.
áResources are all natural material systems which as such are no commodities, but the intactness of which is a basic prerequisite for the continued existence of the earth's chemical and physical equilibrium and, consequently, for the survival of mankind. Resources include: the ozone balance, the CO2 balance, the equilibrium of sea water, the tropical forest, the krill and fish population, etc.
áWorld resource balances are the planned (i.e. ecologically useful and socially responsible) handling of resources. This comprises: the explanation, evaluation, risk assessment and forecasting regarding world resources.
Current research emphasis 
áinternational raw material balances
ásupply problems of the industrial countries
álocation disadvantages of the developing countries
ádumping problems in international raw material trade
árecycling as a source for raw materials
áraw material deposits and connected environmental problems in east Siberia (addendum 1)
ástructural questions and environmental problems of the Polish energy and metal economy
I. Trade intermediates and natural resources
Once international trade in more than final consumer goods is allowed, basic notions of comparative advantage need to be re-examined. We have already discussed the limitations in a multi-commodity word of comparing autarky prices in two countries to predict item-by-item the pattern of trade; generally only correlations can be made except under additional assumptions. With trade in intermediates allowed, the problems in predicting trade in final goods became even greater. As MakKenzie (1945) remarked in one of his classic problem on the Ricardian model, the familiar nineteenth century trade pattern in which Lancashire produced andá exported cotton textiles would most probably not have been observed if Englandá had had to grow its own cotton . We shall have occasion both in this section and to revert to this theme: the pattern of trade in final goods may not be readily deducible from the comparison of pre-trade relative prices in these markets.áááá
I.I Middle products (intermediates)
The phrase ômiddle-productsö was used by Sanyal and Jones (1982) to encompass what traditionally are referred to as intermediate goods, goods-in-process, and natural resources which have been extracted and prepared for trade on world markets. The core concept in their model is that of a productive spectrum whereby, at initial stages, natural resources and raw materials are processed and, in the final stages, goods-in-process and intermediate products are locally assembled for national consumption. International trade, according to this view, takes place in commodities, somewhere in the ômiddleö of this productive spectrum, freeing up a nationĺs input requirements in the final stages of production from its output tradeable middle products at earlier stages.
Such a view of the role of international trade suggests a natural division between that part of the economy which produces commodities (middle products) for the world market (including the local economy), called the Input Tier, and that section of the economy which makes use of internationally traded middle products as input along with local resources to produce none-trade goods for final consumption (the Output Tier). Ruled out by assumption in the simple version on this model is the notion that the ômiddleö stages of the productive spectrum might be ôthickö in the sense that tradeable middle products might use other tradeable middle products as inputs. In addition, in production structure in each tier of the economy as assumed to resemble that of the specific-factors model. Labor is mobile both among sectors in each tier and between tiers. The balance of payments provides an additional link between the two tiers; if the trade account is balanced, the value of total output from the Input Tier of the economy is matched by the value of middle products used as inputs (along with labour) in the Output Tier.
Several types of questions have been raised in the context on this model, and of central concern in each case is the allocation of labour between tiers and the real wage. Fore example, a transfer payment which gives rise to a trade surplus requires labour to be reallocated to the Input Tierá as consumption falls, and this serves unambiguously to reduce the real wage.
á If domestic (and world) prices of trade middle products remain constant to the small country, all non-labour inputs in the Output Tier can be aggregated, a la Hicks, into a composite middle product input, which serves to convert the production structure in the Output Tier from an (n+1)-factor, n-commodity specific-factors model into a two-factors, many-commodity Heckscher-Ohlin model.
In the middle-products model Input Tier is the existence of a world market in which middle products can be exchanged for each other that permits such a conversion.
áá The middle-products model allows countries and sectors to differ in the extent to which local value must be added to transform middle products into final commodities,á andá muchá dependsá uponá thisá comparison.á Itá doesáá not,á however, focus upon another question: in àá vertical productioná structure withá many stages, which goods-in-processá or middleá products doesá à countryá import andá which does itá export?á Twoá recentá papersá haveá tackledá thisá issue independentlyá and with differentá models. Sanyalá (1980) assumesá that iná each ofá two countriesá à commodity is produced in à continuum of stages, withá different Ricardianá labor-only input structures. Depending upon technological differences andá relative countryá size, à cut-off pointá will beá determined, withá one countryá producing theá commodity from raw material stage to some intermediateá point, andá then exportingá this good-in-process átoá theá otherá countryá where laborá is appliedá to finishá the production process.á Byá contrast,á Dixit andá Grossman (1982)á use àá specific-factors model, withá oneá ofá theá commodities (manufacturing)á produced iná à continuumá of stages using capital and labor (the other sector using land andá labor) . Theseá stages are arrangedá suchá that,á asá goods-in-processá develop towardsá the finalá stage, more labor-intensive techniques are required.á Thus withá two countries,á the labor-abundant country will tend to specialize in later stages of the productive spectrum.
They analyze howá endowment changesá alter theá cut-off point,á as wellá as investigating issues related to content protection.
I.II Natural resources
As Chapter 8 in this volume discusses,á the normativeá question ofá pricing natural resources (exhaustible or renewable) has received much attention iná the literature of the pastá decade. Theá middle-products approachá stresses thatá some activities, the extraction of natural resources, must take place locally although international trade then allows other countriesá access toá these resources.á Obviously, comparative advantage changesá over timeá for countriesá engaged iná exporting exhaustible resource. Iná early worká Vanek (1963)á traced throughá the changingá pattern of United States trade in natural resources, and suggested that asymmetries in resource use and availability could account for the Leontief paradox. In à context of multi-level trade, the costs of recourse extractioná in oneá country often depend on the availability of foreign capital. Kemp and Ohyama (1978) haveá presentedá àá simpleá modelá ofá Northá -á Southá trade iná which Southá makes use ofá Northerná capitalá toá developá itsá resourcesá andá exportsá these resourcesá to the Northá whereá theyá areá usedá toá produceá finalá commodities. They putá their model to use iná exploring theá normative issueá of differentá degrees ofá bargaining strength and ability to exploit via export taxes and tariffs iná the twoá regions. Butá the model alsoá stressesá the involvementá of capitalá flows iná resource extraction.á Schmitz and Helmbergerá (1979)á argueá stronglyá forá complementarityá betweená tradeá iná resources and trade in capital, à point also stressedá by Williamsá in hisá 1929 article.á We turn toá considerá moreá generally, now,á the interactioná between tradeá in goodsá and trade in factors.
Siberia is Among Leaders in Raw Materials Markets
Siberia's rating looks more impressive in some groups of goods than its 7-th general placing. Split the whole flow of commercial projects into 9 groups of goods, and for 6 of them Siberia joins the leading three:
Timber and Paper
Iáááááá Siberiaáááááááá 32.6
IIááááá Moscowááááááááá 19.1
IIIáááá St.-Petersburgá 14.2
Iáááááá Siberiaáááááááá 20.3
IIááááá Uralsáááááááááá 13.2
IIIáááá Moscowááááááááá 12.3
Iáááááá Moscowááááááááá 17.2
IIááááá Siberiaáááááááá 15.7
IIIáááá St.-Petersburgá 11.9
Iáááááá Moscowááááááááá 22.0
IIááááá Siberiaáááááááá 14.1
IIIáááá Uralsáááááááááá 5.6
Iáááááá Moscowááááááááá 23.6
IIááááá Siberiaáááááááá 12.4
IIIáááá Volgaáááááááááá 12.1
Iáááááá St.-Petersburgá 20.9
IIááááá Uralsáááááááááá 19.6
IIIáááá Siberiaáááááááá 11.7
ôThe New Polgrave a dictionary of economicö Editor: J.Eatwell, M.Mmilgate P.Newman
Chair of Raw Material Economy and World Resource Balances Prof. Dr.rer.nat. E. Machens (temporary appointment)
ôPositive Theory of International Tradeö Editor: R.W. Jones, J.P. Neary (pages 31-37)
ôThe World Economyá History & Prospectö Editor: W.W Rostow (part 52 ôThe Future of the World Economyö , pages 610-618)
ôSiberia is Among Leaders in Raw Materials MarketsöEditors: Alexei Alexeev, Andrey Kiselev
 In Jones (1980) a two-country Recardian model is illustrated in which one commodity requires an intermediate input and technologies differ between countries The pattern of trade can be reversed as a result of variations in the price of the traded intermediate.áááá
 Both papers cite the use of the continuum conceptá in Dornbusch,á Fischer, andá Samuelson (1977).
 À limitation of both papers is the assumption that costs (orá factor proportions)á move monotonically from lower to higher stages of production. If not, trade may take place à1 many pointsá in the productive spectrum in the absence of inhibiting transport costs.
 This model is described in simplified terms by Findlay (1979).