4820ch5 - Chapter 5 - Theories of International Trade.

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Chapter 5 - Theories of International Trade. Theory of Absolute Advantage (Adam  Smith 1776) - Each country should  specialize in the production and export of  that good which it produces most  efficiently, with the fewest labor-hours.
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Theory of comparative advantage (David Ricardo 1819). Theory of comparative advantage (David  Ricardo 1819) - Even if one country was  most efficient in the production of two  products, it must be relatively more  efficient in the production of one good. It  should then specialize in the production  and exportation of that good in exchange  for the importation of the other. 
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Classical trade theory. Division of labor.  Comparative advantage.  Gains from trade.
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Theory of factor proportions. A country that is relatively labor (capital)  abundant should specialize in the  production and export of that product  which is relatively labor (capital) intensive.
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Other theories. Leontief Paradox - the U.S. was exporting more 
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This note was uploaded on 02/11/2011 for the course GEB 3373 taught by Professor Crum during the Spring '10 term at University of Florida.

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4820ch5 - Chapter 5 - Theories of International Trade.

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