Economics at your fingertips  

Why the theory of comparative advantage is wrong

Ian Fletcher

International Journal of Pluralism and Economics Education, 2011, vol. 2, issue 4, 421-429

Abstract: The theory of comparative advantage is widely misunderstood to demonstrate the universal superiority of free trade. In fact, the theory depends upon a number of key assumptions and fails if they are relaxed. Empirically, many of these assumptions are highly questionable, if not demonstrably false. Among them are an absence of externalities, a lack of international capital mobility, and no income-inequality effects. Also included are assumptions about optimal short- and long-term growth strategies being identical and domestic factor mobility being costless.

Keywords: free trade; comparative advantage; David Ricardo; competitiveness; international trade; factor mobility; capital mobility; income inequality; externalities; international capital; short-term growth; long-term growth; optimal strategies; domestic factors; costless mobility; economics; economic theories. (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in International Journal of Pluralism and Economics Education from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().

Page updated 2023-11-11
Handle: RePEc:ids:ijplur:v:2:y:2011:i:4:p:421-429