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Mercantilism
Posted by mjmedlock on June 3, 2014 in international economics | ∞
Mercantilism is one of the first, if not the first, trade theories. The idea was popular in the 16th, 17th and 18th centuries. The intellectual argument for mercantilism was lost when Adam Smith introduced the world to the theory of absolute advantage. David Ricardo’s work on comparative advantage further discredited the idea.
Unfortunately, despite centuries of intellectual progress on trade theories, neo-mercantilism still has many supporters. The following video sets out the idea behind mercantilism and the arguments against it.