POL SCI 20 Chapter Notes - Chapter International trade: Neomercantilism, Trade Barrier, Absolute Advantage
Document Summary
What"s so good about trade benefits of specialization (division of labor) from trade. Heckscher-ohlin trade theory- the theory that a country will export goods that make intensive use of the facts of good production in which it is well endowed. For example, a labor-rich country will export goods that make intensive use of labor. Capital for investment, machinery and equipment and financial assets. Examples include tariffs, quantitative restrictions (quotas), import licenses, requirements that governments buy only domestically produced goods, and health and safety standards that discriminate against foreign goods tariff- a tax imposed on imports. "buy american" laws that govern what state and local governments can buy. Ricardo-viner (special-factors) model- a model of trade relations that emphasizes the sector in which factors of production are employed rather than the nature of the factor itself. How do since 2008 international trade has declined.
