POLS 051 Lecture Notes - Lecture 9: International Political Economy, Corn Laws, Comparative Advantage
16 Jan 2019
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Document Summary
Free trade is about lowering barriers to trade, including: tariffs, taxes on imported foods and services, customs fees and export taxes, quotas on exports and imports, qualitative restrictions and embargoes. Globalization is a reduction in barriers to trade, foreign investment, finance and currency as well as social goals as well, such as migration barriers. David ricardo pointed out that what happens if one county is best at everything compared to another country: what a country should make depends on the opportunity cost. Comparative advantage is for situations where the goods that a country is relatively best at making compared to what else they could be doing. The heckscher-ohlin theorem dictates that comparative advantaged is determined by factors of production like land, unskilled labor, capital, and skilled labor (human capital: what a country owns the most of determines what is produced. The simple factors model says that workers and owners are tied to their industries, so export.
