0
Comparative Advantage – International Trade Theories
Posted by mjmedlock on June 11, 2014 in international economics | ∞
Comparative advantage is a trade theory which was developed by David Ricardo in the 18th century. The theories builds Adam Smith’s work to show that countries can benefit from trade. Ricardo’s key insight was that two countries could both benefit from trade even if one of the countries had an absolute advantage in producing all […]
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 […]