The General Validity of the Law of Comparative Advantage

1980 ◽  
Vol 88 (5) ◽  
pp. 941-957 ◽  
Author(s):  
Alan V. Deardorff
Keyword(s):  
Comparative Advantage ◽  
General Validity ◽  
The Law

scholarly journals U.S. TRQs for Peanuts, Sugar, and Tobacco: Historical Allocation and Nondiscrimination

2000 ◽  
Vol 29 (1) ◽  
pp. 81-90 ◽  
Author(s):  
David Skully
Keyword(s):  
Law Enforcement ◽  
Market Share ◽  
Comparative Advantage ◽  
Pareto Optimization ◽  
Tariff Rate ◽  
Tariff Rate Quotas ◽  
The Law ◽  
The Difference ◽  
Tariff Equivalent

U.S. peanut, sugar, and tobacco tariff rate quotas (TRQs) are allocated to suppliers on an historical market share basis. Once allocated they become difficult to redistribute to accommodate changes in comparative advantage among suppliers. The distribution of trade departs increasingly from the tariff-equivalent distribution advocated by the WTO principle of nondiscrimination. Article ΧIII of the GATT regarding the rules for historical allocation is examined and applied to four cases of historical allocation: domestic tobacco quota and TRQs for peanuts, sugar and tobacco. The difference between the law enforcement objective of the WTO and the Pareto optimization objective assumed by economists is stressed throughout.

scholarly journals Fragility of Comparative Advantage in Higher Dimensions: An Experimental Investigation

2011 ◽  
Vol 2 (4) ◽  
pp. 151-170
Author(s):  
Baboo M Nowbutsing
Keyword(s):  
Comparative Advantage ◽  
Higher Dimensions ◽  
Experimental Setting ◽  
Optimal Assignment ◽  
Ricardian Model ◽  
Competitive Model ◽  
The Law ◽  
Production Pattern ◽  
Experimental Findings ◽  
Better Than

In this study, an experimental analysis of the fragility of the law of the comparative advantage in higher dimensions is performed. Noussair et al (1995) invoked a trading environment similar to the 2 x 2 Competitive Ricardian Model (CRM) and observed the law of comparative advantage. In this experiment, the same experimental setting is invoked however the number of goods and countries is increased. There were three countries and three goods, two countries were categorised as ‘intermediate’ comparative advantage while one as ‘extreme’ comparative advantage. However, the Jones (1961)’s criterion for optimal assignment was satisfied. The experimental findings reveal the following (1) both the autarky model and the competitive model are rejected as a representation of the data but the competitive model performs better than the autarky model (2) the CRM does not predict the production pattern (3) the CRM does not predict pattern of trade (4) output prices do not converge to the prediction of the theoretical model. Thus the results support the claim of Deardoff (2005).

Sign in / Sign up

Export Citation Format

Share Document