Ricardo's Difficult Idea by Paul Krugman (1996)

Re:Ricardo's Difficult Idea by Paul Krugman (1996) by explanibrag on Wednesday April 27, 2016 @05:24AM (#11578873)

"To me, the simplest explanation is that trade is always beneficial, because parties only agree to it when they both see advantage."

That's true in an efficient-economic-agent sort of way, but do you really think it's true in the real world? Do you think actors (nations, companies, individuals) don't make errors of judgement?

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Re:Ricardo's Difficult Idea by Paul Krugman (1996) by jimmytidey on Wednesday April 27, 2016 @05:36AM (#11578918)

Yes, I think people make errors of judgement. I also think the 'path dependency' mentioned in another comment exists. I also think, as another poster mentioned, there are strategic reasons to ensure a balance of industries in your economy.

I think the comparative advantage model remains a compelling starting point despite all this.

But it doesn't matter what I think, the key thing is that many people who actually do make decisions use the comparative advantage model.

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