GS101 Lecture Notes - Lecture 3: Protectionism, Comparative Advantage, Capability Approach
Document Summary
Binary thinking (north=rich, democratic, south=poor, backwards) but years ago it was reversed. Rise of capitalism revolutionary transformation in society, technology etc. science advances we live in revolutionary era always pushing limits definitive watershed moment . David ricardo on the principles of political economy 1817/ two countries join for trade both will strive neither will not benefit. Question: if they can produce the product themselves for cheaper why trade at a higher price spending less to have same thing with use of trading. Basic theory of international trading= trade with what you do best, your specialization. Developing country that trades grows more than 1% per year while one that doesn"t grows less than 1% per year. Trade causes economic growth which drives poverty declination. Create wealth=fewer poor people, more economic growth less poor in turn more willingness to global trade. The capabilities approach to development: from national development to human development.
