Jan.25-2010 Optimist and Pessimist in the Age of Globalization

Jan.25-2010 Optimist and Pessimist in the Age of Globalization

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Comparative Advantage, Trade and Commercial Policy Classical Trade Theory: Adam Smith , David Ricardo Mercantilist model is the trade model stressing the role of government in trade and emphasizing the importance of balance-of-payment surpluses. Zero Sum Game – my gain is your lost and your gain is my lost Absolute Advantage(Proposed by Adam Smith) o Asserts that a nation would benefit from manufacturing more output than others since it is in the possession of a particular resource or commodity. o By focusing on what you are good at you gain profit by selling more of that. Comparative Advantage(Proposed by David Ricardo) o Comparative Advantage - is the theory that each country specializes in producing specific products, in order to better trade with other states. Neo-Classical Trade Theory: Eli Hecksher- Bertil Ohlin Trade Theory States that countries export those commodities which require, for their production, relatively intensive use of those productive factors found locally in relative
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Jan.25-2010 Optimist and Pessimist in the Age of Globalization

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