A Slightly Different Version
of Comparative Advantage
From Forbes magazine (link courtesy of Newmark's Door):
The more transparent an economy becomes, the more David Ricardo's 19th-century law of comparative advantage rules the day. Then came the commercial Internet, the greatest window into comparative advantage ever invented. Which means if your firm's price-value proposition is lousy, too bad. The world knows.Well, that is one way of looking at comparative advantage. Here is another.
What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different kinds of things.
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