Abstract
The modern economy, and the very world as we know it today, obviously depends fundamentally on specialization and the division of labour, between individuals, firms and nations. The principle of comparative advantage, first clearly stated and proved by David Ricardo in 1817, is the fundamental analytical explanation of the source of these enormous ‘gains from trade’. Though an awareness of the benefits of specialization must go back to the dim mists of antiquity in all civilizations, it was not until Ricardo that this deepest and most beautiful result in all of economics was obtained. Though the logic applies equally to interpersonal, interfirm, and interregional trade, it was in the context of international trade that the principle of comparative advantage was discovered and has been investigated ever since.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Bibliography
Burgstaller, A. 1986. Unifying Ricardo’s theories of growth and comparative advantage. Economica.
Deardorf, A. 1984. Testing trade theories. In Handbook of International Economics, ed. R.W. Jones and P.B. Kenen, Vol. 1, Amsterdam: North-Holland.
Ethier, W. 1984. Higher dimensional issues in trade theory. In Handbook of International Economics, ed. R.W. Jones and P.B. Kenen, Vol. 1, Amsterdam: North-Holland.
Findlay, R. 1970. Trade and Specialization. Harmondsworth: Penguin.
Findlay, R. 1974. Relative prices, growth and trade in a simple Ricardian system. Economica 41, February, 1–13.
Findlay, R. 1978. An ‘Austrian’ model of international trade and interest equalization. Journal of Political Economy 86(6), December, 989–1007.
Findlay, R. 1982. International distributive justice. Journal of International Economics 13, 1–14.
Findlay, R. and Kierzkowski, H. 1983. International trade and human capital: a simple general equilibrium model. Journal of Political Economy 91(6), December, 957–78.
Graham, F. 1948. The Theory of International Values. Princeton: Princeton University Press.
Haberler, G. 1933. The Theory of International Rade. Trans. by A. Stonier and F. Benham, London: W. Hodge, 1936; revised edn 1937.
Heckscher, E. 1919. The effects of foreign trade on the distributions of income. Ekonomisk Tidskrift. English translation in Readings in the Theory of International Trade, ed. H.S. Ellis and L.A. Metzler, Philadelphia: Blakiston, 1949.
Helpman, E. and Krugman, P. 1985. Market Structure and Foreign Trade. Cambridge, Mass.: MIT Press.
Jones, R.W. 1961. Comparative advantage and the theory of tariffs. Review of Economic Studies 28, 161–75.
Jones, R.W. 1965. The structure of simple general equilibrium models. Journal of Political Economy 73, December, 557–72.
Jones, R.W. and Neary, P. 1984. Positive trade theory. In Handbook of International Economics, ed. R.W. Jones and P.B. Kenen, Vol. 1, Amsterdam: North-Holland.
Kantorovich, L. 1965. The Best Use of Economic Resources. Cambridge, Mass.: Harvard University Press.
Kenen, P.B. 1965. Nature, capital and trade. Journal of Political Economy 73, October, 437–60; Erratum, December, 658.
Leontief, W.W. 1933. The use of indifference curves in the analysis of foreign trade. Quarterly Journal of Economics 47, May, 493–503.
Leontief, W.W. 1954. Domestic production and foreign trade: the American capital position re-examined. Economia lnternazionale 7, February, 9–38.
Lerner, A.P. 1932. The diagrammatic representation of cost conditions in international trade. Economica 12, August, 345–56.
Lerner, A.P. 1952. Factor prices and international trade. Economica 19, February, 1–15.
MacDougall, G.D.A. 1951. British and American exports. Economic Journal 61, December, 697–724.
McKenzie, L.W. 1954. Specialisation and efficiency in world production. Review of Economic Studies 21 (3), 165–80.
Ohlin, B. 1933. Inter-regional and International Rade. Cambridge, Mass.: Harvard University Press.
Oniki, H. and Uzawa, H. 1965. Patterns of trade and investment in a dynamic model of international trade. Review of Economic Studies 32, 15–38.
Pasinetti, L. 1960. A mathematical formulation of the Ricardian system. Review of Economic Studies 27, 78–98.
Ricardo, D. 1951. The Works and Correspondence of David Ricardo. Ed. P. Sraffa, Vols I and I V, Cambridge: Cambridge University Press.
Samuelson, P.A. 1948. International trade and the equalization of factor prices. Economic Journal 58, June, 163–84.
Samuelson, P.A. 1949. International factor price equalization once again. Economic Journal 59, June, 181–97.
Samuelson, P.A. 1953. Prices of factors and goods in general equilibrium. Review of Economic Studies 21, 1–20.
Samuelson, P.A. 1962. The gains from international trade once again. Economic Journal 72, December, 820–29.
Steedman, I. 1979a. Trade Amongst Growing Economies. Cambridge: Cambridge University Press.
Steedman, I. (ed.) 1979b. Fundamental Issues in Trade Theory. London: Macmillan.
Stiglitz, J. 1970. Factor-price equalization in a dynamic economy. Journal of Political Economy 78(3), May—June, 456–88.
Stolper, W. and Samuelson, P.A. 1941. Protection and real wages. Review of Economic Studies 9, 58–73.
Vanek, J. 1963. The Natural Resource Content of US Foreign Trade 1870–1955. Cambridge, Mass.: MIT Press.
Viner, J. 1937. Studies in the Theory of International Trade. New York: Harper.
Editor information
Copyright information
© 1991 Palgrave Macmillan, a division of Macmillan Publishers Limited
About this chapter
Cite this chapter
Findlay, R. (1991). Comparative Advantage. In: Eatwell, J., Milgate, M., Newman, P. (eds) The World of Economics. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-21315-3_14
Download citation
DOI: https://doi.org/10.1007/978-1-349-21315-3_14
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-0-333-55177-6
Online ISBN: 978-1-349-21315-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)