SURVEY OF INTERNATIONAL ECONOMICS COURSE

MODULE 3:
PRODUCTION, COMPARATIVE ADVANTAGE AND INCOME REDISTRIBUTION

Textbook Reading:

Production, Trade, and Comparative Advantage

A Pure Exchange Model with Three Traders

Factor Mobility and Income Distribution

(A 2016 version of the textbook reading is available at FlatWorld Knowledge.)

Presentation Slides:

Comparative Advantage PPT

Immobile Factors PPT

China Shock PPT

Recent Events/Analysis:

Pass The Port - David Ricardo's Comparative Advantage Is 200 Years Old Today
(April 2017) This Forbes article discusses the 200-year history of comparative advantage.

Ricardo's Difficult Idea
(1996) This article by Paul Krugman highlights the importance of the principle of comparative advantage.

The rise of China and the future of US manufacturing
(Jan 2018) This article discusses the effects of the China Shock on US manufacturing jobs.

Reconsidering the "China shock" in trade
(Jan 2018) This article offers a more complete analysis of the job effects in the US due to the China Shock.

OVERVIEW

This session introduces production into the pure exchange model, defines comparative advantage and the most fundamental gains from trade, and follows with a discussion of reasons why trade can generate winners and losers.

VIDEO LECTURE

This lecture was recorded in Fall 2016. It is 129 minutes long.

ANSWER KEY

Click HERE for answers to the textbook questions.