Class Notes (835,494)
Canada (509,211)
POLI 243 (112)
Mark Brawley (109)
Lecture

The Politics of Trade: The Domestic Consequences of Specialization

4 Pages
48 Views
Unlock Document

Department
Political Science
Course
POLI 243
Professor
Mark Brawley
Semester
Winter

Description
The Politics of Trade: The Domestic Consequences of Specialization 4/3/12 11:06 PM Recap: We went from the basic logic of comparative advantageà people raise questions about what they have the comparative advantage in. Factors of production, looking at ratios in a country not the total number. Extensions of the H-O Model • The Stolper-Samuelson Theorem o If comparative advantage is right, and trade does deliver advantage, why do some countries have trouble adopting the free trade policies? o The 1920s was a period of economic hardship where free trade fell drastically. o 1931: Why are so many people opposed to free trade? o Assumes factors may move from one application to another with ease, at no cost. o Specialization occurs rapidly and fully o Trade causes domestic prices to change, effect is passed on to returns earned by factors o US § factors of production: a lot of land, not a lot of people, a rich country § the us would export capital intensive goods and import labor intensive goods § by importing labor intensive goods, the demand for labor will drop à the country as a whole benefits but the labor market is hurt o Owners of the relatively abundant factors of production will gain from free trade, those who own the relatively scare factors of production will lose o Critical: One market for all land, one market for all capital, one market for all labor o Factor- based cleavages result à Class Cleavages • Sector-Specificity o Problem with the Stolper-Samuelson model was saying there was no cost to switch between one factor to another o Assumes factors can move from one application to another with great difficulty and only at a high cost o People are "trapped” in the job they are doing, the machines are very job specific o Specialization occurs slowly and is never complete o Trade causes domestic prices to change; effect is passed on
More Less

Related notes for POLI 243

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit