4 ms·
To answer your high level question: Absolutely not. International trade theory's core concepts are structured as a n-player game, with n being the number of na
by Tyrek 8y ago
To answer your high level question: Absolutely not.
International trade theory's core concepts are structured as a n-player game, with n being the number of nations. That is to say, a nation has a fixed amount of resources. If a domestic policy is chosen to optimize for the production of cheap microchips (because you can't produce under-cost for a significant period of time), you are impacting the production of other goods.
When a nation optimizes for the production of a good it can produce advantageously (see: comparative advantage), the world benefits (As you make less of the goods you produce less efficiently). Sure, individual members within the nation may receive subsidies or subsidize others, but that's a domestic issue.
It's difficult to explain this in the level of detail that it warrants to the layman, because the underlying theory is built upon a substantial chunk of underlying economic theory. The biggest issue with Econ is that it's simply unintuitive, and that it takes a lot of effort to switch your mindset.