GMS 724 Lecture Notes - Lecture 4: Trade Bloc, Asia-Pacific Economic Cooperation, North American Free Trade Agreement
3 Oct 2016
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Chapter 5: international trade and factor mobility theory. Mercantilism (1500-1800 a. d. ): proposes that a country should try to achieve a favorable balance of trade (export more than it imports) Neomercantilism: also seeks a favorable balance of trade but its purpose is to achieve some social or political objective. Absolute advantage: suggests specialization through free trade because consumers will be better off buying foreign-made products priced more cheaply than domestic ones. Natural advantage considers climate, natural resources and labor force availability, for example, costa rica. Costa rica"s climate and soil support the production of fruits while its biodiversity supports ecotourism. Acquired advantage consists of either product or process technology, for example, denmark. Denmark exports silver tableware because they produce a distinctive product. For example, imagine that the best physician in town also happens to be the best medical administrator. Economic efficiency: a country"s goal may not be dependent on this.
