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Comparative advantage |
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Comparative 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).Comparative advantageTheory suggesting that specialization by countries can increase worldwide production.Comparative advantage Similar MatchesComparative credit analysisComparative credit analysisComparing a firm to others that have a desired target debt rating in order to deduce an appropriate financial ratio target. Chain of comparative advantageChain 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. Kaleidoscope comparative advantageKaleidoscope comparative advantageA variant of fragmentation due to Bhagwati and Dehejia (1994). Law of Comparative AdvantageLaw of Comparative AdvantageThe principle that, given the freedom to respond to market forces, countries will tend to export goods for which they have comparative advantage and import goods for which they have comparative disadvantage, and that they will experience gains from trade by doing so. Idea due to Ricardo (1815). Comparative market analysisComparative market analysisAn estimate of the value of a property based on an analysis of sales of properties with similar characteristics. Further SuggestionsComparative staticRevealed comparative advantage Dynamic comparative advantage |
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