Search results
Learn about the economic theory of comparative advantage, created by British economist David Ricardo in the 19th century. It explains how countries can trade and specialize based on their different costs and opportunities.
David Ricardo developed the classical theory of comparative advantage in 1817 to explain why countries engage in international trade even when one country's workers are more efficient at producing every single good than workers in other countries.
Jul 17, 2023 · First, the principle of comparative advantage is clearly counterintuitive. Many results from the formal model are contrary to simple logic. Second, it is easy to confuse the theory with another notion about advantageous trade, known in trade theory as the theory of absolute advantage. The logic behind absolute advantage is quite intuitive.
People also ask
What is Ricardo's comparative advantage theory?
What did David Ricardo contribute to economics?
Does Ricardo have a logic of comparative advantage?
What is Deardorff's general law of comparative advantage?
Sep 1, 2023 · Learn about David Ricardo, a classical economist who developed the theory of comparative advantage, labor theory of value, and theory of rents. Find out his life, works, and contributions to economics and politics.
May 14, 2024 · Comparative advantage is an economy's ability to produce a good or service at a lower opportunity cost than its trading partners. Learn how it works, see examples, and explore the role of David Ricardo in developing the theory of comparative advantage.
Aug 8, 2016 · David Ricardo’s theory of comparative advantage is now two centuries old, but it remains at the heart of economists’ theories of international trade. It also continues to provide the underlying economic ethic for liberal International Political Economy (IPE).
Apr 3, 2021 · Comparative advantage is an economic law that shows how countries can benefit from specializing in products where they have lower opportunity costs. Learn how David Ricardo popularized this theory and how it supports free trade policies.
