What is international economic integration? Explain the various stages of international economic integration. Countries around the globe have common economic objectives. Some of the objectives that nations share are decreasing unemployment, providing welfare, etc. These objectives are fulfilled with smooth functioning of trade between the two countries. Nations generally form trade agreements amongst themselves which… Continue reading International Economic Integration
The theory is oversimplified – The Hecksher – Ohlin theory is based on two commodities and two countries. In reality this is not true. There are multiple commodities in real life and each country trades with many other countries. This makes the analysis restrictive in nature. Static in Nature – The theory is not… Continue reading Criticisms of Hecksher – Ohlin theory
David Ricardo was a British political economist and his theory of comparative cost advantage helps us understand why a country even after having a favourable cost condition should trade with the other country. The theory is based on certain sets of assumptions which we’ll deal with one by one.Assumptions:- Wine Cloth England 120L 100L Portugal… Continue reading Explain the Comparative cost theory by David Ricardo.