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"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 efficien
by explanibrag 10y ago
"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?
- jimmytidey 10y agoYes, 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.