Survey of Circumstances affecting the Location of Production and International Trade as Analysed in the Theoretical Literature

Gottfried Haberler

Chapter 1 in The International Allocation of Economic Activity, 1977, pp 1-24 from Palgrave Macmillan

Abstract: Abstract Suppose Ricardo had been asked why Portugal had a comparative advantage in wine; he surely would have answered, in effect though not in these words, because Portugal was well supplied with factors of production needed for wine growing, that is to say suitable land and plenty of sunshine. If the questioner had continued and asked whether there were not still other factors to be considered such as capital, Ricardo would have answered: Yes, certainly; in poor countries where labour is cheap capital will be invested in labour-intensive industries and in rich countries capital will be invested in industries that use comparatively little labour.

Keywords: International Trade; Comparative Advantage; Product Life Cycle; General Equilibrium Theory; Labour Theory (search for similar items in EconPapers)
Date: 1977
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DOI: 10.1007/978-1-349-03196-2_1

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