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Chain of comparative advantage |
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Chain of comparative advantageA ranking of goods or countries in order of comparative advantage. With two countries and many goods, goods can be ranked by comparative advantage (e.g., by relative unit labor requirements in the Ricardian model). A country's exports will then lie nearer one end of the chain than its imports. With two goods, many countries can be ordered similarly.Similar MatchesComparative advantageComparative advantageThe ability to produce a good at lower cost, relative to other goods, compared to another country. In a Ricardian model, comparison is of unit labor requirements; more generally it is of relative autarky prices. With perfect competition and undistorted markets, countries tend to export goods in which they have comparative advantage. See also absolute advantage. Due to Ricardo (1815). Dynamic comparative advantageDynamic comparative advantageA changing pattern of comparative advantage over time due to changes in factor endowments or technology. Comparative credit analysisComparative credit analysisComparing a firm to others that have a desired target debt rating in order to deduce an appropriate financial ratio target. Kaleidoscope comparative advantageKaleidoscope comparative advantageA variant of fragmentation due to Bhagwati and Dehejia (1994). Revealed comparative advantageRevealed comparative advantageBalassa's (1965) measure of relative export performance by country and industry, defined as a country's share of world exports of a good divided by its share of total world exports. The index for country i good j is RCAij = 100(Xij /Xwj)/(Xit /Xwt) where Xab is exports by country a (w=world) of good b (t=total for all goods). Further SuggestionsComparative advantageComparative market analysis Law of Comparative Advantage Comparative static |
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