Explaining comparative advantage
In an extract from his new book 50 Economic Ideas, Edmund Conway considers the importance of comparative advantage built on the work of David Ricardo.
“Ricardo’s theory of comparative advantage is typically used as the backbone of arguments in favour of free trade – in other words abolishing tariffs and quotas on goods imported from foreign countries. It is claimed that, by trading freely with other countries – even those that, on paper, are more efficient at producing goods and services – one can become more prosperous than by closing one’s borders”
Revision: Market Structure, Conduct and Performance
A revision PowerPoint presentation on structure, conduct and performance in markets - designed for A2 micro
Presentation
Market_Structure_Revision.ppt
Robert Frank on Income and Happiness
One of my favourite authors, the ‘Economic Naturalist’, Robert Frank writes about real incomes and happiness in today’s New York Times. He makes the point that “findings suggest that relative income is a much better predictor of well-being than absolute income” and the article is excellent for students wanting to know a little more about the problems in adjusting for price changes in the economy when trying to capture real improvements in living standards.
“Since the mid-1970s, however, income growth has been confined almost entirely to top earners. Changes in per-capita G.D.P., which track only changes in average income, are completely silent about the effects of this shift. A society that aspires to improve needs a better measure of what counts as progress.”
See: Income and Happiness: An Imperfect Link
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