Overview
Respond to two peers later. Week 2 Reading Chapters 2 and 3 in International Economics
- Understanding what contributes to a nation’s comparative advantage is just as important as the analysis. Ricardo did not include contributing factors as part of his theory, but the Henckscher-Ohlin Factory Endowment Theory suggested comparative advantage is largely determined by a nation’s factor endowments. This week, we will consider what leads to comparative advantage and how policies may be used to affect comparative advantage.
- These particular chapters contain a great deal of information, so you may want to skim over the more technical components with the graphing. The media and our weekly assignments will help to highlight the most important parts of the reading.
Review this week’s readings and think about how sources of comparative advantage changed over time for the companies in the articles and how that likely influenced the plans for production. Can you relate this to any other industries in your hometown or region which grew in a similar way?