1.3 — The Ricardian View of Trade: Comparative Advantage — Class Content
Overview
Today we begin looking at David Ricardo’s view of trade, focusing on comparative advantage. We will derive a very simple model of comparative advantage and practice working with it. Next class, we will dive into a more formal Ricardian model that will ultimately be extended into the modern models of international trade over the coming weeks.
Practice
Today you will be working on practice problems on simple comparative advantage:
Readings
- Chapter 2.1 in Feenstra & Taylor
Feenstra and Taylor dive right into Ricardo’s famous one-factor model starting in section 2.2. I am instead easing you into the idea of comparative advantage that doesn’t focus on labor productivity and marginal products, but just some simple numbers. So you can read the first part of Chapter 2 just for a basic overview if you wish.
Slides
Below, you can find the slides in two formats. Clicking the image will bring you to the html version of the slides in a new tab. The lower button will allow you to download a PDF version of the slides.
You can type h to see a special list of viewing options, and type o for an outline view of all the slides.
I suggest printing the slides beforehand and using them to take additional notes in class (not everything is in the slides)!
