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• Overcomes different allocation of resources
• Ricardo’s Model of Trade •Comparative advantage mutual gains even if one party has absolute advantage in all goods
•specialization •goods less expensive/more efficient production Neoliberal Position – ‘Spillover’ Neoliberal Position – ‘Spillover’ benefits of Free trade
• Promotes Interdependence – raises costs of conflict, leads to cooperation • Leads to economic growth that in turn leads to the development of democracy
– Economic growth requires a free market
– A free market needs a ‘middle class’
– Middle class demands political participation “the bourgeois revolution” Neoliberal View on Obstacles to Neoliberal View on Obstacles to Trade
• Wellconnected groups try to politicize trade – Benefits outweigh the costs:
– There are winners and losers
• benefits concentrated, costs are dispersed
•Eg. The US car industry • Free Markets need some degr...
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This note was uploaded on 02/25/2014 for the course IR 271 taught by Professor Corgan during the Fall '08 term at BU.
- Fall '08