GDL

Regional Integration in the Emerging Global Economy: The Case of NAFTA

ISSN: 0362-3319.
Journal from gdlhub / 2017-08-14 12:04:24
Oleh : GLEN ATKINSON, University of Nevada, Reno
Dibuat : 2012-06-19, dengan 1 file

Keyword : Regional Integration in the Emerging Global Economy: The Case of NAFTA
Subjek : Regional Integration in the Emerging Global Economy: The Case of NAFTA
Sumber pengambilan dokumen : Internet

The concept of comparative advantage is the foundation for the advocacy of free international


trade. Comparative advantage rests on all of the assumptions required of free


domestic markets except for the assumption of mobile resources. In fact, comparative


advantage assumes that resources are immobile across national borders. Comparative


advantage demonstrates that each country should specialize in production and if each


country specializes in production, then each country must trade to receive the other


goods needed. Specialization is the opposite of self-sufficiency. The classical economist,


David Ricardo, introduced the concept of specialization based on comparative


advantage. Ricardo predicted that each country would export the commodity it


produces relatively cheaply in the absence of trade. However, the classical statement


fails to explain why production costs vary among countries in the first place (Neary,


1985, p. 411). The modern, or neoclassical, version of comparative advantage rests on


the work of Heckscher and Ohlin who argued that production costs vary because each


good uses a different mix of resources and each country has a different endowment of


resources (Neary, 1985, p. 411). Thus land rich countries will produce goods which


use a lot of land and trade for goods which use a lot of labor in production. Comparative


advantage is based on an uneven endowment of resources around the globe and


these resources are assumed to be owned by resident nationals. Since resources are


immobile, a nation’s wealth is dependent on how well it is endowed and how effec tively it uses the resource base. Specialization, skilled labor and accumulated capital


equipment could enhance the natural endowment. However, all resources are considered


to be immobile; hence free trade in goods would be necessary to make the most


of the planet’s limited resource base.

Beri Komentar ?#(0) | Bookmark

Properti	Nilai Properti
ID Publisher	gdlhub
Organisasi	University of Nevada, Reno
Nama Kontak	Herti Yani, S.Kom
Alamat	Jln. Jenderal Sudirman
Kota	Jambi
Daerah	Jambi
Negara	Indonesia
Telepon	0741-35095
Fax	0741-35093
E-mail Administrator	elibrarystikom@gmail.com
E-mail CKO	elibrarystikom@gmail.com