POL 1025 Lecture Notes - Mercantilism, Distributive Justice, Pareto Efficiency
30 Sep 2013
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Document Summary
Specialization (in your comparative advantage) and trade produces pareto superior outcomes in. Autarky: being totally dependent on yourself; not being involved in the world system. Specializing creates higher consumption if you specialize in trade, you will consume more than if you live in autarky (liberalist argument) Pareto outcomes: at least one person better off and no one worse off. Pareto inferior: a party ending up with less than they started with. Pareto optimum: using all of the resources to create pareto outcomes. Pareto superior: everyone either has the same or has more. Mercantilism: pro-active response, government picks the winners gives subsidies to leading companies, recruits companies to come to the us, government creates a company (airbus) training, insurance, relocation compensation. Embedded liberalism: provide compensation for people in import competing industries.
